Using the provisions of Section 85(1), Marion transferred a piece of land she held personally to a corporation in which she owned all of the shares. The adjusted cost base of the land was $150,000 and it had a fair market value of $225,000. In order to utilize a $25,000 capital loss, she elected a value of $175,000. What is the adjusted cost base of the land to the corporation?
A)$175,000.
B)$150,000.
C)$225,000.
D)$162,500

Question

Quizplus · Accepted Answer

The adjusted cost base of the land to the corporation is the elected value of $175,000, as per the provisions of Section 85(1) which allows for a rollover at an elected amount between the adjusted cost base and the fair market value.

Using the Provisions of Section 85(1), Marion Transferred a Piece