Mr. Marshal Stack owns 100 percent of the outstanding shares of Stack Ltd., a qualified small business corporation. The shares have a PUC and an adjusted cost base of $132,000 and a fair market value of S699,000. The Company has no balance in its GRIP account. On January 31, 2019, Mr. Stack uses ITA 85(1) to transfer these shares to Stack's Investments Ltd., at an elected value of S699,000. As consideration, he receives a note for $390,000 and preferred shares with a fair market value and a legal stated capital of $309,000. Mr. Stack owns all of the shares of Stack's Investments Ltd. and has made no use of his lifetime capital gains deduction. What are the tax consequences of this transaction to Mr. Stack? Include in your answer the adjusted cost base and the PUC of the new preferred shares.