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August 28, 2015, To the Shareholders of Bedrock Cannabis Corp. electing to make a Section 85 Election This Tax Instruction Letter is issued in connection with a proposed arrangement (the Arrangement)

How to fill out section 85 tax election

How to fill out section 85 tax election:

1. Gather all the necessary information: Before beginning to fill out the section 85 tax election form, gather all the relevant information such as the names of parties involved, the type of property being transferred, the fair market value of the property, and any other required details.
2. Download the section 85 tax election form: Visit the official website of the tax authority in your jurisdiction and download the section 85 tax election form. Ensure that you have the most up-to-date version of the form.
3. Fill in the basic information: Start by filling in the basic information such as your name, address, and tax identification number, as well as the same details for the other parties involved in the transaction.
4. Provide details of the transfer: In this section, specify the type of property being transferred, whether it is shares, assets, or other types of property. Include a detailed description of the property and its fair market value as of the transfer date.
5. Calculate the deemed proceeds of disposition: If you are transferring capital property, you will need to calculate the deemed proceeds of disposition. Consult with a tax professional or refer to the tax authority's guidelines for the specific calculation method.
6. Determine the elected amount: In this section of the form, you will need to determine the elected amount, which is the amount you choose to include as the proceeds of disposition. This amount should not exceed the fair market value of the property.
7. Indicate the tax consequences: Specify the tax consequences of the transfer in this section. Provide details on any capital gains, recaptured depreciation, or other tax implications resulting from the transfer.
8. Sign and date the form: Once you have completed all the required sections of the form, sign and date it. Ensure that all other parties involved also sign the form, indicating their agreement and consent.

Who needs section 85 tax election:

1. Business owners transferring assets or shares: Section 85 tax election is typically needed when a business owner is transferring assets or shares to another party, such as during a business restructuring, merger, or acquisition.
2. Individuals undergoing a rollover transaction: Individuals involved in rollover transactions, where capital property is transferred to a corporation or partnership, may also require section 85 tax election to defer tax on any capital gains.
3. Professionals seeking tax deferral strategies: Some professionals, such as doctors, lawyers, or accountants, may utilize section 85 tax election as part of their tax planning strategies to defer taxes on the transfer of assets or shares.

Overall, section 85 tax election is relevant for individuals or businesses involved in asset or share transfers, rollover transactions, or seeking tax deferral strategies. It is important to consult with a tax professional or seek guidance from the tax authority to ensure compliance with applicable tax laws and regulations.

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What is section 85 tax election?

Section 85 tax election is a provision in the Canadian Income Tax Act that allows for the transfer of property between related parties at an elected amount to avoid triggering immediate tax consequences.

Who is required to file section 85 tax election?

Any individuals or corporations transferring property to related parties in Canada are required to file a section 85 tax election.

How to fill out section 85 tax election?

To fill out a section 85 tax election, one must complete Form T2057 and include all necessary information about the property being transferred and the related parties involved.

What is the purpose of section 85 tax election?

The purpose of section 85 tax election is to allow for the deferral of tax on the transfer of property between related parties by electing an agreed-upon amount for the transfer.

What information must be reported on section 85 tax election?

Information such as the parties involved, the property being transferred, the elected amount, and the tax implications must be reported on a section 85 tax election form.