On December 28, 2019, Mrs. Chastity Blue gives her husband shares in a public company with an adjusted cost base of $42,000 and a fair market value of $38,000. During 2020, the shares pay taxable dividends of $4,968 [(138%)($3,600)]. On December 1, 2020, Mr. Blue sells the shares for $53,000. Assume that Mrs. Blue does not elect out of ITA 73(1). What are the tax consequences for Mr. and Mrs. Blue in each of the years 2019 and 2020? If there are no tax consequences for either individual in a given year, you should clearly state this fact in your answer.

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The Answer of On December 28, 2019, Mrs. Chastity Blue gives her husband shares in a public company with an adjusted cost base of $42,000 and a fair market value of $38,000. During 2020, the shares pay taxable dividends of $4,968 [(138%)($3,600)]. On December 1, 2020, Mr. Blue sells the shares for $53,000. Assume that Mrs. Blue does not elect out of ITA 73(1). What are the tax consequences for Mr. and Mrs. Blue in each of the years 2019 and 2020? If there are no tax consequences for either individual in a given year, you should clearly state this fact in your answer.