Martine Flex died three years ago. At the time of her death, a depreciable asset was transferred from her estate to a qualifying spousal trust that was created on her death. The asset had a capital cost of $150,000 and it was the only asset in its class. The balance in the class was $140,000. At the time of Martine's death, the asset had a fair market value of $180,000.
Since that time, the trust has claimed CCA on the asset of $20,000. At the end of the current year, the asset is sold to an arm's length party for $205,000.
Determine the tax consequences of the transfer of the asset to the spousal trust and of the disposition of the asset by the trust. Determine the maximum amount of trust income that can be allocated to Martine's spouse from the sale.

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The Answer of Martine Flex died three years ago. At the time of her death, a depreciable asset was transferred from her estate to a qualifying spousal trust that was created on her death. The asset had a capital cost of $150,000 and it was the only asset in its class. The balance in the class was $140,000. At the time of Martine's death, the asset had a fair market value of $180,000.
Since that time, the trust has claimed CCA on the asset of $20,000. At the end of the current year, the asset is sold to an arm's length party for $205,000.
Determine the tax consequences of the transfer of the asset to the spousal trust and of the disposition of the asset by the trust. Determine the maximum amount of trust income that can be allocated to Martine's spouse from the sale.

Martine Flex Died Three Years Ago