Frank Aquali carries on a sole proprietorship business under the registered name Aquali Proprietors. Mr. Aquali has been very fortunate and the business has grown rapidly. Since he no longer needs all of the income that is produced by the business, he would like to incorporate the business to a new corporation in which he will be the sole shareholder. The new corporation would be named Aquali Ltd. and would have a December 31 taxation year end. On January 1, 20XX, the tax attributes (ACB, UCC etc) and FMV of the assets and liabilities of Aquali Proprietors are as follows: Table showing Tax Costs and FMV's for Aquali Proprietors. The sale/transfer of the Aquali Proprietors' business assets to Aquali Ltd. will take place on January 1, 20XX, and the provisions of ITA 85(1) will be used to minimize any income tax implications of the incorporation of the business. Aquali Ltd. will assume the liabilities of Aquali Proprietors and, in addition, will issue $1,225,000 of a promissory note to Mr. Aquali. With respect to share consideration, the new Company will issue preferred shares with a FMV of $200,000 and common shares with a FMV of $800,000. All of the shares issued