Assume a corporation winds up its operations and is left with cash on hand of

$1,700,000 to distribute to shareholders. The corporation has a capital dividend account of $325,000 and PUC of $300,000.

The corporation has one shareholder, who holds 32,000 shares with an adjusted cost base of $240,000. How will the proceeds be taxed to the shareholder?

Choose the correct answer.

A.Taxable dividend of

$1,400,000

& capital gain of $60,000

B.

Taxable capital gain of $835,000

C.Taxable dividend of

$1,075,000

& taxable capital gain of $30,000

D.

Taxable capital gain of $240,000