1) Which of the following statements about the income tax treatment of gifts of non-depreciable capital property is NOT correct?

A) The ACB to the recipient will be the FMV of the property gifted.

B) The income tax treatment of gifts is different when the gift is made to a non-arm's length person rather than to an arm's length person.

C) The POD to the person making the gift will be the FMV of the property gifted.

D) If the FMV of the property being gifted exceeds its ACB, there will be a capital gain.

2) With respect to dispositions of non-depreciable capital property, which of the following statements is correct?

A) The actual cost of providing warranty coverage on the sale of a capital property cannot be deducted for income tax purposes.

B) When identical properties are sold, the cost can be determined using either FIFO or Average Cost valuation.

C) The actual cost of providing a warranty can be deducted in full in the determination of business income.

D) If a portion of a property is sold, the ACB of that portion must be determined on a reasonable basis which is generally equal to the FMV of the portion sold as a fraction of the total FMV of the property.