Explain the tax implications for Deer Inc. as a result of the acquisition of all shares by Lion Inc.
Explain the tax implications for Deer Inc. as a result of the acquisition of all shares by Lion Inc.
Chapter6: Corporations: Redemptions And Liquidations
Section: Chapter Questions
Problem 54P
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Transcribed Image Text:Deer Inc. is a Canadian Corporation and has a
fiscal year end of December 31. The
corporation currently has the following
balances:
a) Net-capital loss carryovers of $80,000
b) Non-capital loss carryovers of $120,000
c) A depreciable property with the fair market
value (ÉMV) of $80,000, undepreciated
capital cost (UCC) of the property $90,000,
Adjusted Cost Base (ACB) of $100,000.
On February 01, 2021, all the shares of Deer
Inc. were purchased by Lion Inc., an unrelated
Canadian corporation, conducting a similar
business.
Required:
Explain the tax implications for Deer Inc. as a
result of the acquisition of all shares by Lion
Inc.
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