MGAD65H3 Lecture Notes - Lecture 16: Max Boot, Deferral
14 Oct 2017
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Ch16 income deferral: rollover on transfers to a corporation and pitfalls. Ea= greater of: 1) acb 2) boot up to fmv. Lower limit: fmv of non-share consideration received (boot) Inventory / non dep property: least of (tax value), fmv of property, acb of property if capital property or tax value of property if inventory. Eligible capital property: least of (tax value), least of (tax value), fmv of property, ucc of class of property, cost of property to transferor, fmv of property, 4/3 of cec bal, full/ actual cost of property to transferor. In order to defer max cg, boot should no more than the tax value of the property. Acb/puc of the consideration received by the tr (under fmv in=fmv out> ea=acb of consideration) New puc for each class =ea allocate to shares (ie. how much u can extract from co as tax free)*(lsc of each class/ lsc for all shares)
