Which of the following statements with respect to the taxation of capital gains is not correct? A. When government assistance is provided to acquire a capital asset, it is deducted from the adjusted cost base of the asset. B. Gains resulting from dispositions of personal use capital assets are subject to tax. C. When an individual sells shares in a Canadian small business corporation, any resulting capital gain can be deferred if the proceeds are reinvested in shares of another Canadian small business corporation. D. When a part of a group of identical securities is sold, the adjusted cost base of the shares sold must be based on the average cost of the group.

The base of the similar property is calculated by dividing the total capital gains by the units of…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Which of the following statements with respect to the taxation of capital gains is not correct?

	A. When government assistance is provided to acquire a capital asset, it is deducted from the adjusted cost base of the asset.
	B. Gains resulting from dispositions of personal use capital assets are subject to tax.
	C. When an individual sells shares in a Canadian small business corporation, any resulting capital gain can be deferred if the proceeds are reinvested in shares of another Canadian small business corporation.
	D. When a part of a group of identical securities is sold, the adjusted cost base of the shares sold must be based on the average cost of the group.

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