Mary Hanson is holding 1,000 shares of Hanson Operations.They have an adjusted cost base and Paid Up Capital of $20,000.Their current fair market value is equal to $200,000.Electing under ITA 85 in a manner that will maximize tax deferral, the shares are transferred to Hanson Holdings Inc., in return for $8,000 in cash and 250 Hanson Holdings shares with a fair market value of $192,000.The Paid Up Capital of the Hanson Holdings shares will be:
A)$12,000.
B)$20,000.
C)$192,000.
D)$200,000.

Question

Quizplus · Accepted Answer

The Paid Up Capital of the Hanson Holdings shares will be equal to the adjusted cost base of the Hanson Operations shares, which is $20,000.

Mary Hanson Is Holding 1,000 Shares of Hanson Operations