During 2019, Martha Stuart transfers a non-depreciable capital property to a CCPC in which she owns 100 percent of the shares using the provisions of ITA 85. The adjusted cost base of the property is $270,000 and it has an estimated fair market value of $550,000. In return for this property, Ms. Stuart receives a note for $550,000 and preferred shares with a nominal value.
In 2020, Martha is reassessed on the basis that the fair market value of the transferred property was only $415,000. 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, Martha Stuart transfers a non-depreciable capital property to a CCPC in which she owns 100 percent of the shares using the provisions of ITA 85. The adjusted cost base of the property is $270,000 and it has an estimated fair market value of $550,000. In return for this property, Ms. Stuart receives a note for $550,000 and preferred shares with a nominal value.
In 2020, Martha is reassessed on the basis that the fair market value of the transferred property was only $415,000. 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.

During 2019, Martha Stuart Transfers a Non-Depreciable Capital Property to a CCPC