Jakob sold a piece of land he owned to a corporation in which he is the sole shareholder using the provisions of ITA 85(1). The land is capital property, the ACB is $59,600, and it had a FMV of $198,000 at the time of the sale. The elected amount is $59,600. As consideration for the property, he received a promissory note for $30, 100, preferred shares with a FMV of $109,000, and common shares with a FMV of $59,600. Which one of the following is the ACB of the preferred shares (first) and the ACB of the common shares (second)? Round your answers to the nearest cent as needed. O A. $19,071.77 and $10,428.23 O B. Nil and $29,500.00 O C. $109,000.00 and $59,600.00 D. $29,500.00 and Nil
Jakob sold a piece of land he owned to a corporation in which he is the sole shareholder using the provisions of ITA 85(1). The land is capital property, the ACB is $59,600, and it had a FMV of $198,000 at the time of the sale. The elected amount is $59,600. As consideration for the property, he received a promissory note for $30, 100, preferred shares with a FMV of $109,000, and common shares with a FMV of $59,600. Which one of the following is the ACB of the preferred shares (first) and the ACB of the common shares (second)? Round your answers to the nearest cent as needed. O A. $19,071.77 and $10,428.23 O B. Nil and $29,500.00 O C. $109,000.00 and $59,600.00 D. $29,500.00 and Nil
Chapter14: Choice Of Business Entity—operations And Distributions
Section: Chapter Questions
Problem 55P
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Question
Give the explanation of correct and incorrect option.
![Jakob sold a piece of land he owned to a corporation in which he is the sole shareholder using the provisions of ITA 85(1). The land is
capital property, the ACB is $59,600, and it had a FMV of $198,000 at the time of the sale. The elected amount is $59,600. As
consideration for the property, he received a promissory note for $30, 100, preferred shares with a FMV of $109,000, and common shares
with a FMV of $59,600. Which one of the following is the ACB of the preferred shares (first) and the ACB of the common shares (second)?
Round your answers to the nearest cent as needed.
O A. $19,071.77 and $10,428.23
O B. Nil and $29,500.00
O C. $109,000.00 and $59,600.00
D. $29,500.00 and Nil](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3e32d2a2-a76e-4900-b5fb-1a1f83d2e344%2F32394fe3-a7a5-4d9f-86bc-2ebdf6317bd5%2Fn3c4g1_processed.png&w=3840&q=75)
Transcribed Image Text:Jakob sold a piece of land he owned to a corporation in which he is the sole shareholder using the provisions of ITA 85(1). The land is
capital property, the ACB is $59,600, and it had a FMV of $198,000 at the time of the sale. The elected amount is $59,600. As
consideration for the property, he received a promissory note for $30, 100, preferred shares with a FMV of $109,000, and common shares
with a FMV of $59,600. Which one of the following is the ACB of the preferred shares (first) and the ACB of the common shares (second)?
Round your answers to the nearest cent as needed.
O A. $19,071.77 and $10,428.23
O B. Nil and $29,500.00
O C. $109,000.00 and $59,600.00
D. $29,500.00 and Nil
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