Parmida sold a Class 1 depreciable asset to a corporation that she controls in exchange for a non-interest bearing demand loan of $100,000 and preferred shares redeemable for $80,000 in total. Susan and the corporation filed a section 85 election electing for the transfer to take place at $120,000. The characteristics of the asset were as follows: FMV $180,000 Capital Cost 100,000 ACB 100,000 UCC 75,000 The capital cost of the asset to the corporation is: A) $120,000 B) $110,000 C) $85,000 D) $75,000
Parmida sold a Class 1 depreciable asset to a corporation that she controls in exchange for a non-interest bearing demand loan of $100,000 and preferred shares redeemable for $80,000 in total. Susan and the corporation filed a section 85 election electing for the transfer to take place at $120,000. The characteristics of the asset were as follows: FMV $180,000 Capital Cost 100,000 ACB 100,000 UCC 75,000 The capital cost of the asset to the corporation is: A) $120,000 B) $110,000 C) $85,000 D) $75,000
Chapter11: The Corporate Income Tax
Section: Chapter Questions
Problem 16MCQ
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Question
Parmida sold a Class 1
FMV $180,000
Capital Cost 100,000
ACB 100,000
UCC 75,000
The capital cost of the asset to the corporation is:
A) $120,000
B) $110,000
C) $85,000
D) $75,000
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