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 (FMV) 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.

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 (FMV) 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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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