Lambda transferred a non-depreciable capital property to a corporation. The fair market value of the property was
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Lambda transferred a non-depreciable capital property to a corporation. The fair market value of the property was $130,000 and its adjusted cost base to him was $40,000. As consideration for the property, he received a promissory note for $20,000, 10 preferred shares with a total retraction value of $70,000 and 100 common shares worth a total of $40,000. On the transfer, he elected under subsection 85(1) at $40,000. Which one of the following choices represents the adjusted cost base of the preferred and common shares, respectively?
A. | nil and $20,000 | |
B. | $20,000 and nil | |
C. | $12,727 and $7,273 | |
D. | $70,000 and $40,000 |
Related Book For
Corporate Finance
ISBN: 978-0077861759
10th edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
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