Hayden Owns 100% of the Shares of ABC Co

question 3

Multiple Choice

Hayden owns 100% of the shares of ABC Co.Hayden's spouse owns 100% of the shares of XYZ Co.The shares of ABC Co.are valued at $50,000 with an ACB and PUC of $1000.The couple is planning for XYZ Co.to pay Hayden $50,000 in cash for the shares in ABC Co.Which of the following will result from this sale?

• A)Hayden will recognize a capital gain of $50,000.
• B)Hayden will recognize a capital gain of $49,000.
• C)Hayden will recognize a deemed dividend of $50,000 and a capital gain of $0.
• D)Hayden will recognize a deemed dividend of $49,000 and a capital gain of $0.

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Definitions:

Neodissociation Theory

A concept suggesting that consciousness can divide into different components or streams, particularly during hypnosis.

Hidden Observer

A concept in hypnotherapy suggesting a part of the mind remains aware and observant during hypnosis, even if the person appears unresponsive.

Hypnotic Suggestions

Instructions or cues given to a person under hypnosis that are intended to influence their behavior or perception both during the trance and after awakening.

Highly Involved

Characterized by a significant or intense engagement or commitment to an activity, cause, or issue.