During 2019, Mrs. Jeanne Keanings uses ITA 85 to transfer non-depreciable property to a CCPC in which she owns 100 percent of the shares. The adjusted cost base of the property is $136,000 and she believes that it has a fair market value of $283,000. In consideration for this property, Mrs. Keanings receives a note for $283,000 and preferred stock with a nominal value.
In 2020 Jeanne is reassessed on the basis that the fair market value of the transferred property was only $224,000. She accepts the reassessment without objection.
Describe the tax consequences of the transfer and the reassessment. Indicate the adjusted cost base of the consideration, and the adjusted cost base and the PUC of the preferred shares after the reassessment.

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The Answer of During 2019, Mrs. Jeanne Keanings uses ITA 85 to transfer non-depreciable property to a CCPC in which she owns 100 percent of the shares. The adjusted cost base of the property is $136,000 and she believes that it has a fair market value of $283,000. In consideration for this property, Mrs. Keanings receives a note for $283,000 and preferred stock with a nominal value.
In 2020 Jeanne is reassessed on the basis that the fair market value of the transferred property was only $224,000. She accepts the reassessment without objection.
Describe the tax consequences of the transfer and the reassessment. Indicate the adjusted cost base of the consideration, and the adjusted cost base and the PUC of the preferred shares after the reassessment.