Which of the following will always result in an acquisition of control of a corporation? ¢<> Redemption of shares of the majority shareholder by the corporation, ~ leaving the unrelated minority shareholder with all of the issued and outstanding shares of the corporation ) A private company going public > Ownership by the estate of a deceased taxpayer of 100% of the shares ~ of a corporation as a result of the death of the shareholder > Sale of 100% of the shares of a corporation by the owner of the shares ~ to his or her spouse w Hide question 2 feedback Answer a) is correct. ITA 256(7)(a)(ii) deems an acquisition of control not to have occurred when shares are redeemed, if the shareholder acquiring control as a result of the share redemption is related to the shareholder whose shares have been redeemed. In this situation, the shareholder acquiring control is unrelated; therefore, there is an acquisition of control because, prior to the redemption of shares, the minority shareholder did not control the corporation, nor was the minority shareholder related to the majority shareholder who controlled the corporation. After the redemption of shares, the minority shareholder does control the corporation because he, she, or it owns 100% of the shares. Question 3 1/ 1 point At the time of an acquisition of control, a corporation had the following selected assets and net capital loss carryforwards: |land with a capital cost of $500,000 and a fair market value (FMV) of $700,000 a building with a capital cost of $400,000, an FMV of $560,000, and an undepreciated capital cost (UCC) of $350,000
