Gamma transferred some equipment from his proprietorship to a corporation in which he

owned all of the shares. The capital cost of the equipment was $20,000, its UCC before

the transfer was $16,000 and it was valued at $40,000 at the time of the transfer. In order

to utilize some losses of the proprietorship that were about to expire, Gamma elected a

transfer price of $35,000 under subsection 85(1). Which one of the following amounts

represents the capital cost of the property to the corporation?

(A)$16,000

(B) $20,000

(C) $27,500

(D)$35,000