Jennifer owns a rental property with an ACB of $375,000.

Jennifer owns a rental property with an ACB of $375,000. The rental property, in the past, has consistently yielded net rental income of $24,000 per year. As Jennifer is nearing 80 years old, she is thinking of downsizing and divesting some of her assets; the rental property being the first one she is going to dispose of. Jennifer contacted a realtor who told her that similar properties in the area had sold for $800,000. For each of the scenarios below, tell Jennifer the tax implications (capital gains and all attribution of income) of her decision. Also include in your analysis the ACB for the new owner of the rental property.

a) Jennifer gives the rental property to her son, who is 47 years old.

b) Jennifer sells the rental property to her much younger husband for $800,000.

c) Jennifer sells the rental property to her brother-in-law’s sister (42) for $300,000.

d) Jennifer gives the rental property to her granddaughter, who is 14 years old.