Jakob sold a piece of land he owned to a corporation in which he is the sole shareholder using the provisions of IIA 85(1). The land is capital property, the ACB is $59,600, and it had a FMV of $198,000 at the time of the sale. The elected amount is $59,600. As consideration for the property, he received a promissory note for $30, 100, preferred shares with a FMV of $109,000, and common shares with a FMV of $59,600. Which one of the following is the ACB of the preferred shares (first) and the ACB of the common shares (second)? Round your answers to the nearest cent as needed.
Jakob sold a piece of land he owned to a corporation in which he is the sole shareholder using the provisions of IIA 85(1). The land is capital property, the ACB is $59,600, and it had a FMV of $198,000 at the time of the sale. The elected amount is $59,600. As consideration for the property, he received a promissory note for $30, 100, preferred shares with a FMV of $109,000, and common shares with a FMV of $59,600. Which one of the following is the ACB of the preferred shares (first) and the ACB of the common shares (second)? Round your answers to the nearest cent as needed.
Chapter14: Choice Of Business Entity—operations And Distributions
Section: Chapter Questions
Problem 55P
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Transcribed Image Text:Jakob sold a piece of land he owned to a corporation in which he is the sole shareholder using the provisions of ITA 85(1). The land is
capital property, the ACB is $59,600, and it had a FMV of $198,000 at the time of the sale. The elected amount is $59,600. As
consideration for the property, he received a promissory note for $30, 100, preferred shares with a FMV of $109,000, and common shares
with a FMV of $59,600. Which one of the following is the ACB of the preferred shares (first) and the ACB of the common shares (second)?
Round your answers to the nearest cent as needed.
O A. $19,071.77 and $10,428.23
O B. Nil and $29,500.00
O C. $109,000.00 and $59,600.00
D. $29,500.00 and Nil
...
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