What are the tax consequences of distributing

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Problem 1: ABC Ltd. is winding up its operations. The Company has sold all of its assets and paid all of its liabilities, leaving a cash balance of $860,000. Since beginning operations, the Company has had a single shareholder who invested $100,000 to acquire all of its shares. The $100,000 is both the PUC and the adjusted cost base of the shares. All of the cash balance will be distributed to this shareholder. As the Company has a $40,000 balance in its capital dividend account, this amount will be treated as an ITA 83(2) capital dividend. What are the tax consequences of distributing the $860,000 to the corporation's only shareholder?

Complete the following requirements:

1- ITA 84(2) Deemed Dividend.
2- ITA 83(2) Capital Dividend.
3- ITA 88(2) Wind-up Dividend (before Gross-up application)
4. Capital Gain

Reference no: EM132969719

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