Question #18 - Elected Values under Section 85 (2 marks)

The following independent cases involve the transfer of assets under Section 85:

Required: For each of the two cases below, indicate the minimum and maximum amounts that could be elected as a

transfer price under Section 85:

Case A - Equipment with a fair market value of $34,000, an original capital cost of $50,000, and a UCC of $21,000 is

transferred to a CCPC in exchange for $18,000 in cash plus $16,000 in preferred stock

Minimum elected transfer price: Maximum elected transfer price:

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Case B - Land with cost of $100,000 and a fair market value of $120,000 and a is transferred in exchange for $120,000

in non-share consideration and $1,000 in preferred stock (fair market value = $nil).

Minimum elected transfer price: Maximum elected transfer price: