AFM362 Chapter Notes - Chapter 6: Fair Market Value, Property Income, Capital Cost Allowance

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM362
• Professor: Andy Bauer

Document Summary

Chapters 6 & 7: transactions and income attribution. Income attribution: a process of allocating income earned on property that was transferred to a non-arm"s length individual back to the original owner (the transferor). Transfer: a sale, whether or not proceeds are at market value. Includes sales made with loan financing as well as gift s on income producing property. Related persons: the act deems related persons n ot to deal at arm"s length and therefore the attribution rules apply. Direct-line antecedents such as your or your spouse"s parents, grandparents, great grandparents, and your descendant such as your children, grandchildren, great grandchildren, etc. Transactions subject to attribution: income attribution may occur when an asset earning property income and or capital gains and losses is transferred in the following scenarios: (1) (2) An individual transfers or loans property to a spouse, or. An individual transfers or loans property to a non -arm"s length (related) niece, nephew, or minor.