Ben Is Incorporating His Proprietorship and Wishes to Transfer the Following

question 9

Short Answer

Ben is incorporating his proprietorship and wishes to transfer the following assets using a Section 85 rollover:

Ben wishes to defer all gains at this time.He will receive the maximum note receivable possible,and the remainder of the transfer in preferred shares.
Required:
1.What is the elected transfer amount for each of the assets under Section 85?
2.What is the value of the note receivable and preferred shares that Ben must receive in order to defer any gains at this point in time?

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Definitions:

Food Stamps

A government-issued voucher used by recipients to purchase food as part of the Supplemental Nutrition Assistance Program (SNAP), designed to assist low-income families and individuals.

Retirement Benefits

Financial support or services provided to individuals upon retirement, including pensions, social security, and health care benefits, aimed at ensuring financial security in old age.

Income Redistribution

The reallocation of wealth and income in a society, typically through taxation and government spending, aimed at reducing economic inequalities.

Lifetime Contribution

Recognition of an individual's enduring positive impact on a field or society over the span of their career.