Stick Co Owns Land with a Fair Market Value of $100,000

question 5

Multiple Choice

Stick Co. owns land with a fair market value of $100,000, a building with a fair market value of $75,000, and equipment with a fair market value of $25,000. These assets are used for active business conducted in Canada. Which of the following would disqualify Stick Co. from being a small business corporation?

• A) Stick Co. also owns 40% of the non-eligible shares of Rock Co. (a small business corporation), which have a fair market value of $20,000.
• B) Stick Co. also owns portfolio shares in Leaf Co., (with less than 1% ownership), which have a fair market value of $5,000.
• C)Stick Co. also has long-term investments valued at $30,000.
• D) Stick Co. sold the equipment and used the funds to purchase 35% of the shares of Tree Co., a small business corporation.

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