Joe loaned her common-law spouse, Peter , $ 10,000 to reduce their total taxes. Peter ,in turn, used the $10,000 to buy mutual funds.

a) Would this be considered an arm's length or non-arm's length transaction? Why? (explain in detail)

b) If the mutual funds that Peter purchased earned a $500 dividend, who would have to claim this in their income tax - Joe or Peter? Why? ( explain in detail).

Answer rating: 100% (QA)

a This would be considered a nonarms length transaction because Joe and Peter hav... View the full answer