What is a section 85 rollover?

Answer 1

A Section 85 rollover refers to a provision in the Income Tax Act in Canada that allows a taxpayer to transfer certain types of property to a corporation on a tax-deferred basis. This means that the taxpayer does not have to pay immediate taxes on any capital gains or income that might arise from the transfer. Instead, the taxpayer can defer the tax liability until a later date when the shares or property are disposed of. This rollover is often used in the context of incorporating a business or reorganization of assets.