Derek has shares of UltFrisCorp that he would like to transfer, using Section 85, to a holding company that he has recently setup. The ACB and PUC of his UltFrisCorp shares are $30,000. The fair market value of the shares are $1 million. Derek also has $450,000 in his lifetime capital gains exemption that he would like to use as part of this transfer. What is the elected amount that Derek should choose to use with his lifetime capital gains exemption and avoid paying tax on the transfer? Question 4 options: 480,000 1,000,000 450,000 30,000

Derek has shares of UltFrisCorp that he would like to transfer, using Section 85, to a holding company that he has recently setup. The ACB and PUC of his UltFrisCorp shares are $30,000. The fair market value of the shares are $1 million. Derek also has $450,000 in his lifetime capital gains exemption that he would like to use as part of this transfer. What is the elected amount that Derek should choose to use with his lifetime capital gains exemption and avoid paying tax on the transfer? Question 4 options: 480,000 1,000,000 450,000 30,000

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter22: S Corporations

Section: Chapter Questions

Problem 52P

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Craig owns a piece of land that he'd like to use in a new business. He will transfer the land into a newly formed corporation using Section 85. The land has an ACB of $2,000 and a FMV of $11,000. If he takes back a note payable equal to $5,000 on the exchange, and the remaining consideration as shares of the corporation, which of these options includes at least part of the tax consequences? The shares will have an ACB of $0 and a FMV of $11,000 $3,000 capital gain will result $3,000 deemed dividend The shares will have an ACB of $2,000 and a FMV of $8,000
Derek has shares of UltFrisCorp that he would like to transfer, using Section 85, to a holding company that he has recently setup. The ACB and PUC of his UltFrisCorp shares are $30,000. The fair market value of the shares are $1 million. Derek also has $450,000 in his lifetime capital gains exemption that he would like to use as part of this transfer. What is the elected amount that Derek should chose in order to use his lifetime capital gains exemption, and avoid paying tax on the transfer. 1,000,000 30,000 480,000 450,000
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