1) Parent Corp, which owns 100% of the shares of Sub Corp. plans to sell the shares in an arms-length transaction, for their fair market of value of $750,000. The adjusted cost base of the shares is $500,000. Prior to the sales Sub will pay a dividend of $800,000 to Parent. Sub has retained earnings of $650,000, a balance of zero ikn the ERDOTH account, and a balance of zero in the NERDTOH account. What is Parent's taxable capital gain on these transactions when they are completed? A. $150,000 B. $200,000 C. $250,000 D. $400,000 E. none of the above 2) Trish Potter is a 40% partner in The Rose Garden. The ACB of Trish's partnership interest at the beginning of 2020 was $50,000. During 2020, the partnership earned business income of $200,000 and a taxable capital gain of $12,000. Trish withdrew $10,000 from the partnership for personal expenses during the year. What is the ACB of Trish's partnership interest at the beginning of 2021? A. $124,800 B. $129,600 C. $252,000 D. $264,000 3) LPCan is a Canadian limited partnership. LPlnv is an investor who purchased a 20% limited partnership interest in LPCan for $80,000. LPlny's allocation of LPCan's profit and losses is based on a 10% allocation. LPCan had the following profit (loss) amounts for the first three years after LPlnv invested in LPCan: year: $500,000; year 2: ($900,000); year 3: ($500,000.) How much of LPCan's loss in year 3 can LPlnv claim? A. $40,000 B. $0 C. $50,000 D. $100,000 E. none of the above 4) A non-spousal inter-vivos trust has one beneficiary. The trust has a net capital loss carryover from prior years of $7,000. During the current year the trust had capital gains of $33,000 and capital losses of $18,000. What is the maximum amount that the trust can allocate to its beneficiary for the current year? A. $15,000 B. $0 C. $8,000 D. $7,500 E. none of the above KB Sent Ite > Drafts [1] 5) Parent Corp, which owns 95% of the shares of Sub Corp. did a wind-up with Sub Corp. Parent originally purchased the shares of Sub a few years ago for $1,100,000. At that time, the fair market values of Sub's land and equipment, respectively, were $300,000 and $550,000. The tax values of Sub's balance sheet at wind-up were: Cash $310,poo Liabilities $200 Land at cost 240,000 Shareholder's Equity 760 Equipment at UCC 410,000 $960,000 $960 At wind-up, the fair market values of Sub's land and equipment, respectively, were $400,000 and $380,000. Since Parent acquired the shares of Sub, it has received $30,000 in dividends from Sub. What is the "step-up" or "bump" to the non-depreciable assets? 89 A. $30,000 B. $300,000 C. $60,000 D. $310,000 E none of the above