raig 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 $4,000 and a FMV of $7,000. If he takes back shares of the corporation and a note payable for $2,000 as consideration, what is the ACB of the shares he takes back? Assume he elects to defer as much tax as he can. Answer options: 4,000 7,000 2,000 5,000 6,000
raig 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 $4,000 and a FMV of $7,000. If he takes back shares of the corporation and a note payable for $2,000 as consideration, what is the ACB of the shares he takes back? Assume he elects to defer as much tax as he can. Answer options: 4,000 7,000 2,000 5,000 6,000
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter12: Corporations: Organization, Capital Structure, And Operating Rules
Section: Chapter Questions
Problem 15P
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Question
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 $4,000 and a FMV of $7,000. If he takes back shares of the corporation and a note payable for $2,000 as consideration, what is the ACB of the shares he takes back? Assume he elects to defer as much tax as he can.
Answer options:
|
4,000 |
|
7,000 |
|
2,000 |
|
5,000 |
|
6,000 |
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