Auntie Annie has prepared Note 1 which estimates DLC's Balance Sheet as of December

31, 2019 for her company De La Cruz Law Inc (DLC). Auntie Annie wants to incorporate it since she will pay fewer taxes.

Annie currently operates DLC in the unincorporated form and needs to know what issues she should

consider in deciding whether or not the business should be incorporated. She anticipates that the

business will earn $150,000 for the year ended December 31, 2019 and assumes that the same

income will be earned in 2020 within a corporation that will have a December 31 year-end.

If the assets of the business are transferred on January 1, 2020 (as per the information presented in

Exhibit 1), Annie wants to know how the transfer can be accomplished and the relevant tax

implications to ensure that the transfer will be tax-free. She has heard about the ITA 85(1) election.

She also needs to know what issues to consider in determining the value at which the assets

should be transferred for tax purposes and any other pertinent advice regarding his decision.

Finally, she needs you to recommend a great compensation package that would be mutually

beneficial from a tax point of view for his company and his family. They need about $60,000 cash per year.

1) In point form, in all, list at least 10 advantages and disadvantages of incorporating for DLC