It Is the End of 20x8, and ABC Inc

Question

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The Answer is A) At the point of sale, >91% of ABC's assets were a combination of assets used in active business and shares in a connected small business corporation, thus meeting the 90% FMV of assets test required for a 'small business corporation'.

A) At the point of sale, >91% of ABC's assets were a combination of assets used in active business and shares in a connected small business corporation, thus meeting the 90% FMV of assets test required for a 'small business corporation'. B) During the previous 24 months (prior to the purchase of the land), >87% of ABC's assets were a combination of assets used in active business and shares in a connected corporation. (While the active assets in ABC alone do not meet the 50% test, the combination of the active assets and the shares in XYZ Ltd. meets the 50% test since XYZ Ltd. has more than 90% of the fair market value of its assets used in active business in Canada.) ABC is a qualified small business corporation (QSBC) since: a) it is a small business corporation at the time of sale, b) the shares have not been held by an unrelated person during the past 24 months, and c) ABC meets the 24 month > 50% FMV of assets test since XYZ (which is required to meet the >50% test) meets the > 90% FMV test.

B) During the previous 24 months (prior to the purchase of the land), >87% of ABC's assets were a combination of assets used in active business and shares in a connected corporation. (While the active assets in ABC alone do not meet the 50% test, the combination of the active assets and the shares in XYZ Ltd. meets the 50% test since XYZ Ltd. has more than 90% of the fair market value of its assets used in active business in Canada.)

ABC is a qualified small business corporation (QSBC) since: a) it is a small business corporation at the time of sale, b) the shares have not been held by an unrelated person during the past 24 months, and c) ABC meets the 24 month > 50% FMV of assets test since XYZ (which is required to meet the >50% test) meets the > 90% FMV test.

It Is the End of 20x8, and ABC Inc

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