BUSI 4005 Lecture Notes - Lecture 10: Capital Gain, Capital Loss
24 May 2018
School
Department
Course
Professor
Corporate reorganization
Rollover: transfer asset for tax purpose
Share consideration: must receive share as part of consideration
Non share consideration: receive other than share
Elected amount: elect to defer income of shareholder
1. Objective
a. Tax free rollover
b. Shareholder at same economic position as before
c. ACB= tax value of asset transfer
2. Type of eligible property
a. Depreciable
b. Non depreciable
c. Inventory
d. Eligible capital property
e. Resource property
3. Situations
a. Puc = tax value of asset transfer
i. ACB =ACB old
ii. No CG
iii. Proceed = cost
b. Transfer price is not tax value
i. Elected amount
ii. Class b common share as consideration
1. ACB share = ACB land + CG transfer + UCC building
2. FMV
3. PUC
4. ACB land
c. Non share consideration
i. Elected amount
1. CG = FMV-ACB
ii. Consideration
1. PUC= nil
2. ACB = elected amount – FMV boot – note- mortgage
4. Admin issue
a. Transfer eligible property to Canadian Corporation and get more
than 1 consideration
b. Joint election filing
i. Permit future reserve for doubtful debt or bad debt write
off
ii. Late filing – within 3 year due date + penalty
iii. Earliest of before any taxpayer make election to file income
of Section 150
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