Maria owns investments with the following adjusted cost base (ACB) and fair market value (FMV). Maria would like to transfer some of these assets to her family in order to achieve income splitting. Asset ACB FMV 300 shares in public companies $450,000 $600,000 900 units in mutual funds 630,000 900,000 She is proposing the following transfers: 1. A gift of 100 units of mutual funds to each of her two grandchildren (aged two and three). The mutual funds distribute dividends, interest, and capital gains each year. 2. A gift of 100 shares of public companies to her husband. These shares pay an annual dividend of approximately 10%. Required: 

a) Determine the tax implications of the gift of the mutual fund units to Maria's grandchildren.

 b) Determine the tax implications of the gift of public company shares to Maria's husband, assuming that she does not elect out of the spousal rollover. 

c) Determine the tax implications of the transfer of public company shares to Maria's husband, assuming that she elects out of the spousal rollover and her husband provides consideration equal to the FMV of the transferred property.

Answer rating: 100% (QA)

Gift obtained from a relative isnt taxable in fingers of the recipient beneathneath phase fifty six of Income Tax Act 1961 The people whore taken into ... View the full answer