Income Tax question Can you please help with all answers? Thank you

Moe Granite incorporated his residential construction business 15 years ago. The company, Bed- rock Ltd., has been very successful and very profitable to the point that it has excess cash that it has been regularly investing. Moe and his family live in a home he purchased a few years before he was married. Moe also acquired two plots of land- one located along the lakefront of an expanding area that has grown in popularity since he purchased it and a second in an area that Moe expected would one day become a growing commercial sector given its proximity to a major city. The family home is his only principal residence. Moe had always planned to build a luxurious home on the vacant land but he has been so busy with the company he never had a chance to begin the construction of that lakefront home. Moe recently sat down with his accountant, telling him about his plans and adding that he needed additional cash from the company to realize his dreams. He estimated that the construc- tion of the lakefront home would take almost a full year given its location and would likely cost in excess of $1 million. He was unwilling to sell the current family home until the construction of the lakefront home was complete. He also was unwilling to sell the second piece of land, telling his accountant that the time was not right and he expected the value to increase substantially in the next few years. Moe told his accountant that he was in a quandary as to how to come up with the cash he would need given he was unwilling to borrow from commercial lenders or his own company, did not want to sell his current family home or the second plot of land or pay any additional income taxes by drawing additional salary or dividends since he was already paying tax at the highest tax bracket. Given the expanded tax on split income (TOSI) he was also unwilling to entertain any family income splitting planning with his spouse and their three minor children. Moe's accountant told him that he had a plan that would accomplish his objectives at minimum cost. The accountant explained that Moe could sell both the current family home and the second piece of land to his company. This, explained the accountant, would keep the current home and the land in the family" while giving him all the funds necessary to complete the lakefront con- struction and avoiding the payment of any additional income taxes. Moe agreed. The plan is to sell/transfer the current family home and the second piece of land to the company. ITA 85(1) will be used to transfer both properties. The accountant added that while ITA 85(1) is not necessary for a fair market value sale of the family home since none of the gain will be taxable, he advised that the additional flexibility provided made it worthwhile to include it in the election. The sale agreements are all dated November 18, 2020. The two properties and their relevant values on the date of transfer are as follows: Tax Cost (ACB) $450,000 115,000 Fair Market Value (Moe) $1,000,000 500,000 Principle Residence Vacant Land The fair market value (FMV) for each property was estimated by Moe. Assume that no profes- sional valuation was done. There is an existing mortgage on the principal residence of $160,000. The company will pay Moe the following amounts for each property: Assumption of the Mortgage Promissory Note Preferred Shares Total Sale Price of the Principal Residence $ 160,000 840,000 Nominal $1,000,000 Note: The reference to "nominal" means $1 or other negligible amount, which you can ignore in your answer. Assumption of the Mortgage Promissory Note Preferred Shares Total Sale Price of the Principal Residence $ Nil 115,000 385,000 $500,000 Total consideration for ITA 85(1) purposes is as follows: Assumption of the Mortgage Promissory Note Preferred Shares Total Sale Price of the Principal Residence $ 160,000 955,000 385,000 $1,500,000 The ITA 85(1) elected amount for the principal residence will be $1,000,000 and $115,000 for the land. Assume that in 2022, the 2020 ITA 85 election is audited and reassessed by the CRA on the basis that the FMV pf the principal residence is $750,000 and $250,000 for the vacant land. Required: A. Calculate the effect on Moe's net income that will result from the ITA 85(1) election as originally filed. B. Determine the ACB and PUC of the preferred shares and ACB of the promissory note received by Moe on the transfer. C. Determine the tax consequences of the reassessment by the CRA. Be sure to include in your answer revisions to the ACB of the promissory notes and ACB and PUC of the pre- ferred shares after the reassessment. D. Could Moe have done anything different to avoid the CRA reassessment? Moe Granite incorporated his residential construction business 15 years ago. The company, Bed- rock Ltd., has been very successful and very profitable to the point that it has excess cash that it has been regularly investing. Moe and his family live in a home he purchased a few years before he was married. Moe also acquired two plots of land- one located along the lakefront of an expanding area that has grown in popularity since he purchased it and a second in an area that Moe expected would one day become a growing commercial sector given its proximity to a major city. The family home is his only principal residence. Moe had always planned to build a luxurious home on the vacant land but he has been so busy with the company he never had a chance to begin the construction of that lakefront home. Moe recently sat down with his accountant, telling him about his plans and adding that he needed additional cash from the company to realize his dreams. He estimated that the construc- tion of the lakefront home would take almost a full year given its location and would likely cost in excess of $1 million. He was unwilling to sell the current family home until the construction of the lakefront home was complete. He also was unwilling to sell the second piece of land, telling his accountant that the time was not right and he expected the value to increase substantially in the next few years. Moe told his accountant that he was in a quandary as to how to come up with the cash he would need given he was unwilling to borrow from commercial lenders or his own company, did not want to sell his current family home or the second plot of land or pay any additional income taxes by drawing additional salary or dividends since he was already paying tax at the highest tax bracket. Given the expanded tax on split income (TOSI) he was also unwilling to entertain any family income splitting planning with his spouse and their three minor children. Moe's accountant told him that he had a plan that would accomplish his objectives at minimum cost. The accountant explained that Moe could sell both the current family home and the second piece of land to his company. This, explained the accountant, would keep the current home and the land in the family" while giving him all the funds necessary to complete the lakefront con- struction and avoiding the payment of any additional income taxes. Moe agreed. The plan is to sell/transfer the current family home and the second piece of land to the company. ITA 85(1) will be used to transfer both properties. The accountant added that while ITA 85(1) is not necessary for a fair market value sale of the family home since none of the gain will be taxable, he advised that the additional flexibility provided made it worthwhile to include it in the election. The sale agreements are all dated November 18, 2020. The two properties and their relevant values on the date of transfer are as follows: Tax Cost (ACB) $450,000 115,000 Fair Market Value (Moe) $1,000,000 500,000 Principle Residence Vacant Land The fair market value (FMV) for each property was estimated by Moe. Assume that no profes- sional valuation was done. There is an existing mortgage on the principal residence of $160,000. The company will pay Moe the following amounts for each property: Assumption of the Mortgage Promissory Note Preferred Shares Total Sale Price of the Principal Residence $ 160,000 840,000 Nominal $1,000,000 Note: The reference to "nominal" means $1 or other negligible amount, which you can ignore in your answer. Assumption of the Mortgage Promissory Note Preferred Shares Total Sale Price of the Principal Residence $ Nil 115,000 385,000 $500,000 Total consideration for ITA 85(1) purposes is as follows: Assumption of the Mortgage Promissory Note Preferred Shares Total Sale Price of the Principal Residence $ 160,000 955,000 385,000 $1,500,000 The ITA 85(1) elected amount for the principal residence will be $1,000,000 and $115,000 for the land. Assume that in 2022, the 2020 ITA 85 election is audited and reassessed by the CRA on the basis that the FMV pf the principal residence is $750,000 and $250,000 for the vacant land. Required: A. Calculate the effect on Moe's net income that will result from the ITA 85(1) election as originally filed. B. Determine the ACB and PUC of the preferred shares and ACB of the promissory note received by Moe on the transfer. C. Determine the tax consequences of the reassessment by the CRA. Be sure to include in your answer revisions to the ACB of the promissory notes and ACB and PUC of the pre- ferred shares after the reassessment. D. Could Moe have done anything different to avoid the CRA reassessment