Ms. Hart has just met with you to talk about incorporating her business and having her husband participate in its future growth in value. She is a Canadian resident and has provided you with the balance sheet and additional information concerning her unincorporated active retail clothing business. She has picked November 10, 2015 as the date when she wishes to transfer all of her business assets and liabilities to a corporation (Hart Ltd.) in which her husband owns 100% of the common shares. She wants your advice on how to do this with the minimum amount of personal tax. The following financial information concerning the business as of November 10, 2015, has been provided: Shares in public companies (note 1) Accounts receivable (note 2) Inventory Land (held as inventory) Prepaid property insurance Building (Class 1, cost $90,000) Land (capital property) Goodwill Additional Information: Tax Value $ 11,000 13,000 8,000 100,000 600 70,000 140,000 nil Fair Market Value $ 6,000 10,000 9,000 220,000 500 150,000 160,000 80,000 1. The shares are capital property to Ms. Hart. She owns less than 1% of each public company. 2. The tax reserve for doubtful debts taken in the previous year was $1,000. The original cost of the accounts receivable before deducting the reserve was $14,000. 3. The unincorporated business has liabilities of $60,000 which are to be assumed by Hart Ltd. Mr. Hat is also a Canadian resident. Ms. Hart has specifically asked you to provide her with a tax-effective plan to achieve her obj ectives. She has heard that she will have to receive some shares as consideration so she want to know the tax consequences if she sells these shares or has the company buy them back at a later date. For the next meeting you agree that you will: A. Assess the situation B. Analyze the major issues C. Conclude and advise