Lisa, an individual, had a piece of land with ACB=$12,000 and FMV=$20,000. Using the Sec. 85, Roll-over election, the L-Corp purchases the land from Lisa for the market value price of $20,000 and pays Lisa by issuing preferred shares of $8,000 and a note payable to Lisa for $12,000. Both Lisa and the L-Corp elect that the transfer price for tax purposes is $12,000.

a) Determine the tax elements of property Lisa received and L-Corp received (FMV, ACB, UCC, PUC, if any)

b) What are the tax consequences for Lisa if the corporation pays the debt and buys back Lisas preferred shares?