Transferring Property to a Corporation or Partnership

Written By Passion Works Digital
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Transfer to a Corporation

Certain transfers to a corporation can take place on a rollover basis given that the following criteria are met:

  • The corporation receiving the property must be a taxable Canadian corporation

  • The consideration of the property transferred must include at least one share from the corporation

  • Transferred property must be eligible property. Does not include real property owned by non-residence or land held as an investment.

  • The taxpayer and corporation must complete form T2057 and file the next tax year by the individual or Corp.

The taxpayer and the corporation are allowed to set the transfer price. The set price determines the disposition for the taxpayer and the adjusted cost base for the corporation.

The general rule is that consideration should not exceed the adjusted cost base of the property as this would not trigger capital gains.

Property Transferred to/from Partnership or Proprietor

Generally, property transferred to a partnership is done so at FMV. However, the ACT allows a tax-free rollover where a joint election is filed and consideration contains interest in the partnership

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