Jace Scully owns $76\%$ of the common shares of Scully Ltd$.$ Jace's shares have an ACB of $$598,000.$ The Scully common shares have a total PUC of $$997,000$ and a total FMV of $$2,498,000.$ Using the provisions of ITA $86,$ Jace exchanged his shares for cash of $$598,000$ and preferred shares with a legal capital and FMV of $$1,396,000.$ What i the PUC of Jace's preferred shares?

A$.$ $$159,720$

B$.$ Nil

C$.$ $$399,000$

D$.$ $$1,396,000$