In 2017, Julia transfers shares of a Canadian public corporation to Caesar. Julia acquired the shares for a total cost of $5,200 in 2014. At the time of the transfer the FMV of the shares was $10,800. In 2018 the shares paid eligible dividends of $1,200. Assume that in 2019, Caesar will sell the shares for a total of $16,400. Indicate the resulting net income for Julia and Caesar in each of 2017, 2018, and 2019 by filling in the chart below. You do not need to show your work.

If there are no tax consequences for a given year, indicate by writing "Nil" or "0".

Required :

Assume the following for each set of independent facts:

a.      Caesar is Julia's minor child and the shares were given to Caesar as a gift

b.      Caesar is Julia's spouse, no election was made, and the shares were sold to Caesar for $8,300

c.      Caesar is Julia's spouse, the couple elects out of ITA 73(1), and the shares were sold to Caesar for $11,700

a.)

Consequences to Julia..........................Consequences to Caesar

2017.........................................................

2018.........................................................

2019.........................................................

2017.........................................................

2018.........................................................

2019.........................................................

b.)

Consequences to Julia..................................Consequences to Caesar

2017.........................................................

2018.........................................................

2019.........................................................

2017.........................................................

2018.........................................................

2019.........................................................

c.)

Consequences to Julia..............................Consequences to Caesar

2017.........................................................

2018.........................................................

2019.........................................................

2017.........................................................

2018.........................................................

2019.........................................................

For income tax purposes, what are the rules for the proceeds of disposition for the seller / giver and the adjusted cost base for the person who acquires property in the following cases?

Mother gives property to minor child

Mother sells property to minor child for less than fair market value

Wife sells property to husband for fair market value with no election

Wife sells property to husband for more than fair market value with election.

Answer rating: 100% (QA)

Consequence a 5600 3500 taxable to Julia and 100 and 1100 taxable to Caesar Consequence b 1200 11200 ... View the full answer