After indicating that the acquisition by a shareholder of an interest in a corporate life insurance policy for less than the fair market value (FMV) of that interest would engage s. 15(1) to the extent of the excess of the FMV of the interest in the life insurance policy over the consideration paid, CRA stated:
[T]he amount by which the FMV of the interest in the policy included in income under subsection 15(1) exceeds the cash surrender value will be included in the ACB calculation. Consequently, the ACB of the life insurance policy interest for the shareholder following the transfer should be equal to the FMV of that interest.