Match the Following Situations with the Appropriate Sections of the Income

question 2

Essay

Match the following situations with the appropriate sections of the Income Tax Act.
Situation
1.Shares are exchanged between two corporations at their tax costs.As a formal tax agreement is not required,this is a useful method for public corporations with many shareholders.
2.Shares of two or more corporations are exchanged for shares of a new entity,and all of the assets of the corporations are transferred to the new entity.
3.Common shares are converted to preferred shares and held by the seller.New common shares are issued (often at a nominal value)to the purchaser.
4.Assets are sold from a vendor corporation to a buyer corporation at an elected value,usually the assets' tax costs (i.e.UCC or ACB),in exchange for shares and a non-share payment not exceeding the elected value.
Section from the Income Tax Act
_______ Subsection 85(1)
_______ Subsection 85.1(1)
_______ Subsection 86(1)
_______ Subsection 87(1)

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Definitions:

Object Constancy

Correctly perceiving objects as staying the same in their size, shape, color, and lightness, across viewing conditions that yield different physical input to the eyes.

Wavelengths

The spacing between consecutive peaks of a wave, particularly in sound waves or electromagnetic waves.

Flipbook

A book with a series of pictures that vary gradually from one page to the next, so that when the pages are turned rapidly, the pictures appear to animate by simulating motion or some other change.

Stroboscopic Motion

An optical illusion where continuous motion is represented by a series of short or instantaneous samples, as seen in motion pictures.