Bruno owns 75 percent of the common shares of a corporation. His adult daughter owns the remaining 25 percent. During the current year, Bruno transferred shares from his investment portfolio that had an adjusted cost base of $55,000 to the corporation. These shares had a fair market value of $85,000 at the time of transfer and Bruno elected to transfer them at $55,000 under the provisions of ITA 85. As consideration for the transfer, he received a promissory note for $55,000 and preferred shares with a fair market value of $20,000. Which one of the following is the elected transfer price (first)and the adjusted cost base of the preferred shares (second)?
A)$55,000 and $20,000
B)$55,000 and $30,000
C)$65,000 and $20,000
D)$65,000 and Nil

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The Answer of Bruno owns 75 percent of the common shares of a corporation. His adult daughter owns the remaining 25 percent. During the current year, Bruno transferred shares from his investment portfolio that had an adjusted cost base of $55,000 to the corporation. These shares had a fair market value of $85,000 at the time of transfer and Bruno elected to transfer them at $55,000 under the provisions of ITA 85. As consideration for the transfer, he received a promissory note for $55,000 and preferred shares with a fair market value of $20,000. Which one of the following is the elected transfer price (first)and the adjusted cost base of the preferred shares (second)?
A)$55,000 and $20,000
B)$55,000 and $30,000
C)$65,000 and $20,000
D)$65,000 and Nil

Bruno Owns 75 Percent of the Common Shares of a Corporation