Ms. Zhang transfers a depreciable asset to a CCPC in which she is the only shareholder. The asset has a cost of $100,000 and a UCC of $64,000. Ms. Zhang will elect a transfer price equal to the fair market value of the asset which is $150,000. This transfer will result in:

 

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A. A taxable capital gain of $43,000 with the capital cost of the asset to the transferee being S150,000. B. A taxable capital gain of S25,000, recapture of $36,000 and the capital cost of the asset to the transferee will be $100,000. C. A taxable capital gain of $25,000, recapture of $36,000 and the capital cost of the asset to the transferee will be S150,000. D. A taxable capital gain of $25,000, recapture of $36,000 and the capital cost of the asset to the transferee will be $125,000. A. A taxable capital gain of $43,000 with the capital cost of the asset to the transferee being S150,000. B. A taxable capital gain of S25,000, recapture of $36,000 and the capital cost of the asset to the transferee will be $100,000. C. A taxable capital gain of $25,000, recapture of $36,000 and the capital cost of the asset to the transferee will be S150,000. D. A taxable capital gain of $25,000, recapture of $36,000 and the capital cost of the asset to the transferee will be $125,000.

Answer rating: 100% (QA)

D A taxable capital gain of 25000 recapture of 36000 ... View the full answer