CRA indicates that the s. 73(1) rollover can apply to a sale for cash proceeds at a gain over ACB

After having previously settled an alter ego trust, the settlor sells non-depreciable capital property to the Trust for cash proceeds exceeding the property’s adjusted cost base. CRA indicated that such receipt of cash sale proceeds would not preclude the s. 73(1) rollover from applying – and that the answer would not change if the settlor subsequently gifted the cash proceeds to an adult child.

Neal Armstrong. Summary of 15 June 2022 STEP Roundtable, Q.12 under s. 73(1).