Section 87: Incorporation rollover.

(1) Where—a) a person transfers an asset (with or without any liability not in excess of the adjusted cost base of the asset) to a company in exchange for a shareholder interest in the company; and b) the person has a fifty percent or greater shareholder interest in the company immediately after the exchange, the transfer shall not be treated as a disposal of the asset by the transferor but shall be treated as an acquisition by the transferee. (2) The transferee's cost base of an asset to which subsection (1) applies shall be the same as the transferor’s adjusted cost base at the time of transfer. (3) The cost base of a share received in an exchange described in subsection (1) shall be equal to the adjusted cost base of the asset transferred less any liability transferred.