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

$1,300,000

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

$225,000

and PUC of

$300,000.

The corporation has one shareholder, who holds

27,000

shares with an adjusted cost base of

$230,000.

How will the proceeds be taxed to the shareholder?

Choose the correct answer.

A.

Taxable capital gain of $545,000

B.Taxable dividend of

$775,000

& taxable capital gain of $35,000

C.Taxable dividend of

$1,000,000

& capital gain of $70,000

D.

Taxable capital gain of