Katie has Canadian public company shares that are worth $50,000 and pay a dividend of $2,500 each year. Her adjusted cost base on these shares is $35,000. She is already in the top tax bracket. She would like your advice on the following proposed transactions:

Sell the shares to her husband

(1) Sell the shares to him for cash of $50,000

(2) Sell the shares to him for a non-interest bearing note of $50,000

(3) Sell the shares to him for cash of $40,000.

Sell the shares to her 25-year-old daughter 

(4) Sell the shares to her for cash of $50,000

(5) Sell the shares to her for a non-interest bearing note of $50,000

(6) Sell the shares to her for cash of $40,000.

Answer rating: 100% (QA)

In Canada 50 of the cost of any capital gains is taxable Every Canadian is entitled to a lifetime capital beneficial properties exemption If you inten... View the full answer