Ms takase is the sole shareholder of takase ltd she owns, Ask an Expert

Accounting

Ms. Takase is the sole shareholder of Takase Ltd. She owns 2,500 shares with a PUC and adjusted cost base of $400,000, and a fair market value of $1,000,000. Giant Holdings Ltd. acquires these shares in return for 10,000 of its common shares, which are currently trading for $100 per share. The rollover is completed using ITA 85.1. The results of the transaction will be:

Ms. Takase will report a capital gain of $600,000 as a result of her deemed disposition. The adjusted cost base of her new shares in Giant Holdings Ltd. will be nil.

Ms. Takase will be deemed to have disposed of her Takase Ltd. shares for an amount equal to their adjusted cost base. There will not be a capital gain to report on this disposition.

The shares of Giant Holdings Ltd. that Ms. Takase acquires will have a deemed adjusted cost base of $1,000,000, the greater of the fair market value and the PUC of the Takase Ltd. shares. There will not be a capital gain to report on this disposition.

The shares of Giant Holdings Ltd. that Ms. Takase acquires will have a deemed PUC of $1,000,000. She will report a capital gain on the disposition of $600,000.

View complete question

Financial Accounting, Accounting

Category:- Financial Accounting
Reference No.:- M91958437

Have any Question?Write your Review or question?

Related Questions in Financial Accounting

Highway express has paid annual dividends of 132 133 138

Highway Express has paid annual dividends of $1.32, $1.33, $1.38, $1.40, and $1.42 over the past five years, respectively. What is the average divided growth rate?

What has been strides position on dividend payouts in the

What has been Strides' position on dividend payouts in the past (pattern, relationship with earnings, etc.)? What factors affected its dividend policy?

Assignment - problem questionsthis assessment task consists

Assignment - Problem questions This assessment task consists of five (5) questions. All workings, when appropriate, must be shown to substantiate your answers. Question 1 - Financial statement disclosures You are the fin ...

In its first year of operations cullumber company

In its first year of operations, Cullumber Company recognized $31,800 in service revenue, $6,600 of which was on account and still outstanding at year-end. The remaining $25,200 was received in cash from customers. The c ...

At the start of 2013 shasta corporation has 15000

At the start of 2013, Shasta Corporation has 15,000 outstanding shares of preferred stock, each with a $60 par value and a cumulative 7% annual dividend. The company also has 28,000 shares of common stock outstanding wit ...

Case study - the athletes storerequiredonce you have read

Case Study - The Athletes Store Required: Once you have read through the assignment complete the following tasks in order and produce the following reports Part 1 i. Enter the business information including name, address ...

Comprehensive problem - lou barlow a divisional manager for

Comprehensive Problem - Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five-year period. His annual pay raises are determined by his division's ...

A review of the ledger of oriole company at december 31

A review of the ledger of Oriole Company at December 31, 2017, produces these data pertaining to the preparation of annual adjusting entries. 1. Prepaid Insurance $19,404. The company has separate insurance policies on i ...

Establish and maintain accounting info systems and provide

Establish and maintain accounting info systems and Provide management accounting information Assignment - Assignment 1 - Case Studies Case Study 1 - Review the case study information below and complete the steps mentione ...

Question 1 an organization owes pound300000 tax at 17x4 and

Question 1 . An organization owes £300,000 tax at 1.7.X4 and £450,000 at 30.6.X5. Its income statement for the year to 30.6.X5 includes a tax charge of £400,000. How much tax was actually paid in the year to 30.6.X5?

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Financial Accounting Expert