Which of the following would be considered part of the boot received by a transferor in an ITA 85(1)rollover?
A)Common shares of the transferee.
B)Redeemable preferred shares of the transferee.
C)Non-redeemable preferred shares of the transferee.
D)The assumption of transferor debt by the transferee.

Question

Quizplus · Accepted Answer

In an ITA 85(1) rollover, the transferor typically receives a combination of consideration for the transfer and "boot". Boot is any consideration received by the transferor that is not in the form of qualifying replacement property (QRP). Examples of boot include cash, non-QRP assets, or the assumption of transferor debt by the transferee. Common shares, redeemable preferred shares, and non-redeemable preferred shares are all forms of QRP and would not be considered boot in this context. Therefore, only the assumption of transferor debt by the transferee would be considered part of the boot received by the transferor in an ITA 85(1) rollover.

Which of the Following Would Be Considered Part of the Boot