Final answer:
The parent would recognize a $500 capital gain in 2023.
Step-by-step explanation:
The question asked is: in 2023, a parent gifted 100 shares to their 16-year-old child. the cost of the shares to the parent was $1,000. at the time of the gift, the shares were worth $1,500. which of the following statements would be true? multiple choice
a. the child would have an adjusted cost base of $1,000.
b. the parent would not have to recognize a capital gain.
c. if the child sold the shares for $1,800, the $300 capital gain would be attributed back to the parent.
d. the parent would recognize a $500 capital gain in 2023.
The correct statement in this case would be option d. the parent would recognize a $500 capital gain in 2023.
When the parent gifts the shares to the child, they are considered to have disposed of the shares at their fair market value of $1,500. Since the cost of the shares to the parent was $1,000, they would recognize a capital gain of $500 ($1,500 - $1,000) when gifting the shares.
This capital gain would be attributed to the parent, not the child. Therefore, options a, b, and c are all incorrect.