Janice Tabor has a depreciable property that she wishes to transfer to a new corporation under the provisions of Section 85(1). The property has a capital cost of $450,000, a UCC of $225,000, and a fair market value of $675,000. The transfer will take place at an elected value of $400,000.

Ms. Tabor is considering the following alternative consideration packages:

Alternative

One Two Three

Debt Of The New Corporation $150,000 $375,000 $300,000

Preferred Shares 150,000 300,000 Nil

Common Shares 375,000 Nil 375,000

Total $675,000 $675,000 $675,000

All of the amounts in the preceding table are fair market values.

Required:

A. For each of the three alternatives, determine the adjusted cost base of the individual items of consideration received by Ms. Tabor.

B. For each of the three alternatives, determine the legal stated capital and the Paid Up Capital for the preferred and/or common shares issued.