Which of the following scenarios would be appropriate for a section 85 rollover?
A)A shareholder of a corporation wishes to transfer their vehicle to his corporation.The vehicle originally cost $20,000 and has a market value of $12,000.
B)A corporation wishes to convert land owned by the company into a parking lot.
C)A taxpayer wishes to transfer property worth $200,000, with an ACB of $90,000, to their corporation.
D)A corporation is selling its equipment to another corporation and does not wish to own shares in the other corporation.

Question

Quizplus · Accepted Answer

A section 85 rollover is used for the tax-deferred transfer of property to a corporation, where the transferor receives shares in exchange. Option C fits this scenario as the taxpayer wishes to transfer property to their corporation, and the property has an ACB of $90,000, meaning it was not acquired solely for the purpose of transferring it to the corporation. Options A, B, and D do not involve the transfer of property to a corporation for the purpose of receiving shares in exchange, and therefore are not appropriate for a section 85 rollover.

Which of the Following Scenarios Would Be Appropriate for a Section