Ron is 44 years old and wishes to retire at age 62. An important planning consideration for him is to undertake some succession planning. Estate freezes have been used extensively by professionals and this is one option available to Ron. Identify which statement is incorrect.

 options:

	Section 85, an internal reorganization, is an effective way to provide some succession planning for the business owner.
	Section 86 applies to the exchange of shares by a shareholder when organizing the corporation's capital.
	In general, the rules of section 85, permit the property to be transferred into a corporation on either a tax-free basis or at a cost that is determined by the taxpayer.
	A section 85 rollover requires a formal election to be filed with the CRA and that a new corporation be formed.