During the current year, Geoff Lionel sells depreciable property to his spouse. The FMV of the property at the time of the sale was $200,000. The capital cost is $160,000, and the UCC $107,000. It is the only property in its CCA class. His spouse pays $200,000 from funds that she received as an inheritance. Describe the income tax consequences to Mr. Lionel and the tax cost of the property to his spouse as a result of the sale assuming that he does not elect to avoid the rollover of ITA 73(1). How would the results change if Mr. Lionel does elect to avoid ITA 73(1)?
ITA 73(1) Applies
Geoff Linel
Deemed Proceeds of Disposition
Spouse
Capital Cost
UCC
Deemed CCA
Elect to avoid ITA 73(1)
Geoff Linel
Proceeds of Disposition
Adjusted Cost Base
Capital Gain
Inclusion Rate
Taxable Capital Gain
Recapture or (Terminal loss)
Spouse
Deemed Capital Cost
Adjusted Cost Base
