AFM 461 Final: Chapter 16 summary notes Summary of chapter 16. Useful to look over before exam or doing homework.
16 Oct 2011
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When transferring assets to a corporation, the corporation can elect it to be a tax free transfer using 85(1) elected price. Elected transfer price = corporation"s cost of property 85(1)(a) For depreciable property: capital cost to the corporation = capital cost of the property to the transferor, deemed to have cca = capital cost transfer price. Elected transfer price is allocated to the cost of property received (boot or shares) Puc of shares received is dependent on the tax value and the boot received. We want to make the puc to make the transferor in the exact same position if she had kept the asset and sold it at fmv. If you do not designate an order, it is considered that both assets have a transfer price of the ucc, and you will be left with a credit balance in your ucc account.
