5. SarahSmithers Sarah and her brother Sam each own 50% (50 common shares each) of Smithereens Inc.(Smithereens). They inherited the shares from their mother when she passed away a few years ago. The paid-up capital of the shares is $100 in total ($50 for 50%), which was also their mothers ACB of the shares. The shares had a fair market value of $500,000 in total when their mother passed away. They are now worth $1,000,000. I have had a look at the most recent balance sheet and Smithereens should be a qualified small business corporation. Sarah tells me she has never used any of her capital gains exemption which I will confirm with CRA. Sarah has never worked in the business. Sam runs Smithereens and would like to buy his sister out. He has offered to either redeem Sarahs shares, but them from her personally or have Samco, a company of which he is the only shareholder, buy the shares. For all three alternatives, Sarah would be paid fair market value. I need an analysis of the tax consequences to Sarah for all three alternatives. please answer the question according to canadian tax