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Ms. Bimo transfers a non-depreciable capital property to a corporation in which all of the common shares are owned by her son. The property has a fair market value of $150,000 and an adjusted cost base of $35,000. Ms. Bimo transfers the property using an elected amount of $35,000 and the corporation issues her a note payable in the amount of $35,000 and preferred shares with a fair market value of $100,000. The ITA 85(1)(e.2) excess amount (i.e. indirect gift) is: a. $15,000 b. $115,000 c. $100,000 d. $35,000

Ms. Bimo transfers a non-depreciable capital property to a corporation in which all of the common shares are owned by her son. The property has a fair market value of $150,000 and an adjusted cost base of $35,000. Ms. Bimo transfers the property using an elected amount of $35,000 and the corporation issues her a note payable in the amount of $35,000 and preferred shares with a fair market value of $100,000. The ITA 85(1)(e.2) excess amount (i.e. indirect gift) is: a. $15,000 b. $115,000 c. $100,000 d. $35,000

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Ms. Bimo transfers a non-depreciable capital property to a corporation in which all of the common shares are owned by her son. The property has a fair market value of $150,000 and an adjusted cost base of $35,000. Ms. Bimo transfers the property using an elected amount of $35,000 and the corporation issues her a note payable in the amount of $35,000 and preferred shares with a fair market value of $100,000. The ITA 85(1)(e.2) excess amount (i.e. indirect gift) is: a. $15,000 b. $115,000 c. $100,000 d. $35,000
Transcribed Image Text:Ms. Bimo transfers a non-depreciable capital property to a corporation in which all of the common shares are owned by her son. The property has a fair market value of $150,000 and an adjusted cost base of $35,000. Ms. Bimo transfers the property using an elected amount of $35,000 and the corporation issues her a note payable in the amount of $35,000 and preferred shares with a fair market value of $100,000. The ITA 85(1)(e.2) excess amount (i.e. indirect gift) is: a. $15,000 b. $115,000 c. $100,000 d. $35,000
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