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The following three independent Cases involve transfers of assets under ITA 85. Case One Merchandise inventories with a FMV of $15,000 and a cost of

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The following three independent Cases involve transfers of assets under ITA 85. Case One Merchandise inventories with a FMV of $15,000 and a cost of $10,000 are transferred in exchange for $12,000 in non-share consideration and $3,000 in preferred shares. Case Two Land with an ACB of $120,000 and a FMV of $150,000 is transferred in exchange for non-share consideration of $120,000 and preferred shares of $30,000. Case Three Equipment with a capital cost of $50,000, a FMV of $35,000, and UCC of $20,000 is transferred in exchange for non-share consideration of $25,000, preferred shares of $5,000, and common shares of $5,000. All of the equipment is in the same CCA Class. Required: For each of the three Cases provide the following information: A. The minimum and maximum elected amounts under the provisions of ITA 85. Assuming the minimum elected amount is chosen, the amount of capital gain or business income to be included in the income of the transferor

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