Brian Snow Owns All of the Common Shares of Treeline

question 8

Essay

Brian Snow owns all of the common shares of Treeline Boots Ltd.,a Canadian-controlled private corporation.The shares have a fair market value of $150,000,an ACB of $30,000,and a PUC of $5,000.Brian would like to retire soon,so he has offered the company to his son,Walter.Walter is young and does not have a lot of disposable income,and as such,a Section 86(1)estate freeze has been recommended to Brian.Brian's common shares will be converted to preferred shares,which are redeemable for $150,000.
Required:
Discuss the tax consequences of this transaction for Brian,indicating the ACB and the PUC of the new shares.

---

Definitions:

Optimistic View

A mindset that tends to expect favorable outcomes and focuses on positive aspects of a situation.

Human Nature

The inherent characteristics, behaviors, and traits shared by all humans.

Empirical Research

The process of collecting and analyzing data through observation and experimentation to gain knowledge or prove theories.

Behavioural Approach

A psychological perspective focusing on observable behaviors and how they're learned through interaction with the environment.