Question 4 chapter 8: 10 marks

Your client is considering transfers of several of her personal investments. Below is a summary of their current plans. All the investments described below are investments in public company shares.

1. Client wants to gift shares worth $10,000 to her 14-year-old daughter. The shares have an adjusted cost base (ACB) to client of $6,000 and earn an annual dividend of $1,000.

2. Client wants to sell shares worth $22,000 to her adult sister for half the value ($11,000). The shares have an ACB to client of $15,000. These shares earn an annual dividend of $750.

3. Client wants to transfer shares with a fair market value of $30,000 to her wholly owned (100% controlled) corporation, Irene Consulting Ltd. The shares have an ACB of $40,000.

Required:

Discuss and calculate ALL the tax implications for client (transferor) and the transferee of each of the planned transfers of shares. This would include the ACB, gains, and any attribution discussions.