Reference no: EM132873175

Mustapha wired money from his account in Montreal to his 15 year old daughter Bibi in Vancouver. The amount transferred was 25,000.

Question 1: If Bibi placed it in a fix deposit account at 6%, what would be the tax consequence to Mustapha?

Question 2: What would be the tax consequence to Bibi?

Question 3: How much interest would be attributed to each of them?

Question 4: What would happen if Mustapha had gifted the $ 25,000 instead of simply wiring the money?

Question 5: What if instead of wiring the money, it was shares of GameShop worth $ 25,000 that Mustapha had purchased for $ 3,000, 5 years ago?

Question 6: What would have happened tax wise to Mustapha and Bibi if two years after receiving the shares, Bibi decided she needed to access the entire amount and sold all her shares in GameStop for $ 30,000?