Lyndon Taylor transferred a piece of machinery to his corporation, making use of Section 85 of the Income Tax Act.The equipment's fair market value was $20,000 and its unde- preciated capital cost was $15,000.The elected transfer price was $15,000.As consideration, Lyndon received a $14,900 promissory note and 5,100 preferred shares with a redemption amount of $1 per share.What is the aggregate adjusted cost base of Lyndon's preferred shares?

Question

Quizplus · Accepted Answer

The aggregate adjusted cost base of the preferred shares is calculated as the elected transfer price ($15,000) minus the promissory note ($14,900), which equals $100.

Lyndon Taylor Transferred a Piece of Machinery to His Corporation