Indicate the tax consequences to the relevant shareholders of the transaction. Tax consequences would include the
increase or decrease in the individual shareholder's Taxable Income, any change in the adjusted cost base and/or PUC of any shares that are still in the hands of the individual shareholder after the described transaction(s), and any federal dividend tax credits that result from the described transaction. Dividends are non-eligible.
At incorporation, Lason Inc. issued 300,000 common shares at $32 per share, for a total value of $9,600,000. The original owner later sold these shares to Lawrence Foster for $28 per share, for a total of $8,400,000. During the year subsequent to this sale, the Company redeemed 50,000 of these shares for $1,700,000.
Recently Asked Questions
- Please refer to the attachment to answer this question. This question was created from Chapter 20-11.
- Instead of hiring a gardener, I mow my neighbor's lawn every other week and he mows my lawn every other week, do I have taxable income?
- A Canadian-controlled private corporation (CCPC), is entitled to the small business deduction, and pays taxes of 20%, on taxable income of $10,000. All the