NAL transfers (8 marks)

Transfer to adult child and father. Your client Aisha owns shares in ABC Corporation. The original shares cost $100,000, and they currently have a FMV of $165,000. Aisha is considering transferring the shares to her adult child or to her father.

Required: For the following three scenarios, determine the i) amount of income to be recorded by your client Aisha when she transfers the shares, as well as the ii) ACB of the shares to the taxpayer receiving the shares (i.e. her adult child or her father), and iii) shares will be subsequently sold by the taxpayer receiving the shares; assume the sale price in the future is $200,000; calculate the total gain and who should report it (i.e. Aisha or the taxpayer receiving the shares).

		Impact to Aisha	Impact to adult child	Impact to father
Scenario 1: Aisha gifts the shares	Income (gain) to record on date of transfer
	New ACB of shares
	Amount of double taxation from future sale / is there attribution?
Scenario 2: Aisha sells the shares for $185,000	Income (gain) to record on date of transfer
	New ACB of shares
	Amount of double taxation from future sale / is there attribution?
Scenario 3: Aisha sells the shares for $125,000	Income (gain) to record on date of transfer
	New ACB of shares
	Amount of double taxation from future sale / is there attribution?

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