In each of the following independent situations, Mario Quinn transfers an asset to a taxable Canadian...

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In each of the following independent situations, Mario Quinn transfers an asset to a taxable Canadian corporation owned by him and makes an election under Section 85 of the Income Tax Act with respect to the transfer. Asset transferred ACB & capital cost FMV UCC Sale price Payment received-Cash Shares (FMV) ONE Land $ 8,000 11,000 0 11,000 7,000 4,000 TWO Computer software $120,000 100,000 0 100,000 0 100,000 Required: For each of the four situations, determine the following: THREE Customer list. 10,000 $ 8,000 5,000 8,000 3,500 4,500 a) The minimum elected amount under Section 85 of the Income Tax Act. b) The income or loss for tax purposes to be recognized by Mario. c) The corporation's ACB, capital cost and UCC for the assets purchased. d) The ACB of the shares of the corporation received by Mario. e) The PUC of the shares of the corporation received by Mario. FOUR Marketable securities $13,000 19,000 N/A 19,000 15,000 4,000 In each of the following independent situations, Mario Quinn transfers an asset to a taxable Canadian corporation owned by him and makes an election under Section 85 of the Income Tax Act with respect to the transfer. Asset transferred ACB & capital cost FMV UCC Sale price Payment received-Cash Shares (FMV) ONE Land $ 8,000 11,000 0 11,000 7,000 4,000 TWO Computer software $120,000 100,000 0 100,000 0 100,000 Required: For each of the four situations, determine the following: THREE Customer list. 10,000 $ 8,000 5,000 8,000 3,500 4,500 a) The minimum elected amount under Section 85 of the Income Tax Act. b) The income or loss for tax purposes to be recognized by Mario. c) The corporation's ACB, capital cost and UCC for the assets purchased. d) The ACB of the shares of the corporation received by Mario. e) The PUC of the shares of the corporation received by Mario. FOUR Marketable securities $13,000 19,000 N/A 19,000 15,000 4,000

Answer rating: 100% (QA)

Solution Situation 1 a Minimum elected amount 7000 EMV of land b Loss for tax purposes 1000 ... View the full answer