When Shares Are Transferred from One Group of Shareholders to Another

question 3

Multiple Choice

When shares are transferred from one group of shareholders to another and there is a change in control, which of the following applies?

• A) Net-capital losses that arise following the change in control are automatically deemed to have expired.
• B) Non-capital losses arising prior to the change in control are automatically deemed to have expired.
• C) Net-capital losses arising prior to the change in control may be used against income from the business that incurred the loss if that business is carried on at a profit or with a reasonable expectation of profit in the year in which the losses are applied.
• D) Non-capital business losses arising prior to the change in control may be used against income from the business that incurred the loss if that business is carried on at a profit or with a reasonable expectation of profit in the year in which the losses are applied.

---

Definitions:

Categorisation Theory

A psychological theory that describes how individuals group objects, people, or events into categories based on common attributes or meanings.

Causal Language

Refers to the use of linguistic expressions that denote cause-and-effect relationships.

Geometric Figures

Shapes or forms that are defined in mathematics and geometry, such as circles, squares, and triangles.

Human Properties

Characteristics or attributes that are inherent or typically associated with humans, such as cognitive abilities or emotions.