Ms. Samantha Shields is the sole shareholder of Shields Ltd. It is a Canadian controlled private corporation and its common shares have a fair market value of $920,000, an adjusted cost base (ACB) of $500,000, and a paid up capital (PUC) of $400,000.

At this time, Shields Ltd. has no balance in its GRIP account. Ms. Shields exchanges all of her Shields Ltd. shares for cash of $480,000 and preferred shares that are redeemable for $440,000. This was done as Ms. Shields was entering retirement and wanted to transition control and future growth of the company to her nephew, Bryce.

Also at this time, Bryce purchases common shares in Shields Ltd. at a total cost of $100.

Required: Determine the ACB and the PUC of the redeemable preferred shares held by Ms. Shields. Indicate the amount, and type, of any income and/or loss that will result from this transaction for Ms. Shields. Show all your supporting calculations in order to receive marks. Canadian Tax rules 2021