Section 85 Rollovers: ACB and PUC Determination
Автор: Sameer Alrishani
Загружено: 2026-01-26
Просмотров: 1
This presentation explains the technical mechanics of Section 85 rollovers, a tax strategy used to transfer assets to a corporation while minimizing immediate tax consequences. The video outlines a specific three-step process for calculating the adjusted cost base (ACB) of received shares by first accounting for "boot" and then allocating remaining value among different share classes. It also highlights the necessity of paid-up capital (PUC) reductions to ensure that shareholders cannot extract value from a company tax-free by setting the legal capital higher than the asset's tax cost. Through practical examples involving depreciable assets, inventory, and land, the video demonstrates how to determine the minimum and maximum elected values for a transfer. Ultimately, these calculations ensure that the PUC and ACB are aligned, preserving the deferred tax liability for a future date.
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