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

$1,600,000

to distribute to shareholders. The corporation has a capital dividend account of

$200,000

and PUC of

$400,000.

The corporation has one shareholder, who holds

28,000

shares with an adjusted cost base of

$340,000.

How will the proceeds be taxed to the shareholder?

Choose the correct answer.

A.

Taxable capital gain of $660,000

B.Taxable dividend of

$1,200,000

& capital gain of $60,000

C.

Taxable capital gain of $340,000

D.Taxable dividend of

$1,000,000

& taxable capital gain of