ECN 204 Lecture Notes - Lecture 7: Promissory Note, Students Of Georgetown, Inc.
Document Summary
Benefit happens when : the fmv of prop exceeds greater of : The elected amount and: where its reasonable to regard it as a benefit. Benefit for mr. phil: fmv of land - total consideration received. The fmv of prop trans is less than fmv of the total consideration rec. The boot of 200k exceeds the e. a of 30k, so the e. a is bumped up to 150k (max it can be elected is the fmv of the prop), triggering a capital gain. Of 150k - 30k acb of land =120k) Elected amount is allocated to become the cost of the consideration. Received (boot or shares) in exchange for the prop being transferred in the following order: non share consideration up to the fmv of that property (if there is a benfit,, it. The cost of the boot consideration is the elected amount + the boot. Puc of preferred shares reduced use new elected amount.
