What are the 3 non-eligible property types excluded from s.85?
- Inventory real estate
- Depreciable property w/ terminal loss (UCC > FMV, only asset left in its class)
- Cash
Would it be recommended to rollover an asset with an accrued loss (FMV < Cost)?
No because s.85 is a mechanism in place to defer paying tax on capital gains.
What is s.22?
Section 22 applies to a business selling their AR. The business is able to deduct any loss on sale, computed as the difference between POD and the face value.
In what order should you allocate the elected amount?
- BOOT
- Preferred shares
- Common shares
What election amount should you always choose to transfer an asset at?
ACB ($0 TCG)
What is the PUC of newly elected shares equal to?
PUC = Elected amount - FMV BOOT
What must you always check after completing a s.85 rollover?
FMV brought in = FMV taken out
What is the maximum amount of BOOT you can take out?
Elected amount
