Question 1

Jean Hill, a Canadian resident, transfers 100 percent of the shares in Hill Inc.to a new company, Jean Ltd.The Hill Inc.shares have an adjusted cost base and PUC of $100,000, and a fair market value of $1,000,000.The transfer is made under the provisions of ITA 85 at an elected value of $850,000.Ms.Hill receives cash of $850,000 and retractable pre- ferred shares with a fair market value of $150,000.What are the immediate tax consequences to Ms.Hill, resulting from this transfer?

Accepted Answer

The answer of Jean Hill, a Canadian resident, transfers 100...

Question 2

Which of the following conditions is not required for ITA 84.1 (dividend stripping rules) to be applicable?

Accepted Answer

ITA 84.1 does not require the subject corporation to be associated with the purchaser corporation after the disposition of the shares. The other conditions listed are necessary for the application of the dividend stripping rules.

Question 3

Which of the following conditions is not required for ITA 55(2) (capital gains stripping rules) to apply?

Accepted Answer

The capital gains stripping rules under ITA 55(2) do not specifically require the corporation selling the shares to be a private company.

Quiz 2: Byrd Chens Canadian Tax Principles 2

Which of the following conditions is not required for ITA 84.1 (dividend stripping rules) to be applicable?

Which of the following conditions is not required for ITA 55(2) (capital gains stripping rules) to apply?