Nicky is the sole shareholder of Nic Ltd., a corporation with an October 31 year-end. Nic Ltd. produces Accounting Visors. Nicky started the corporation with an initial capital investment of $30,000 for which he received 1,000 shares. Nicky has let it be known that he wants to sell his business to enable him to build up a new tax consulting business. As a result, Nicky has received two separate offers, both from individuals and both effective January 1,2021.

Offer One Over Taxed is willing to pay $1,000,000 for the shares of Nic Ltd.

Offer Two Under Taxed is willing to buy the assets through an existing corporation that she owns. Under's offer is as follows:

Asset Offer

Marketable securities $ 14,000

Accounts receivable 60,000

Inventory 254,000

Land 372,000

Building 330,000

Equipment 12,000

Goodwill 180.000

Total offer $1.222.000

You have been given the following additional information.

1. Details of the assets and liabilities of Nic Ltd.

Assets

Tax Value Cash $ 15,000

Marketable securities, adjusted cost base 26,000

Accounts receivable face value $62,000

Less: allowance (6.000')= 56,000

Inventory, cost amount 230,000

Land, adjusted cost base 144,000

Building undepreciated capital cost (UCC) (capital cost is $235,000) 203,000

Equipment, UCC (capital cost is $65,000) 22,000

Goodwill, UCC Class 14.1 (cost is $38,000; acquired 33,500 2017)

Liabilities Trade payables 47,000

Bank loan 118,000

2. The paid-up capital of the outstanding shares in Nic Ltd. is $30,000.

3. The capital dividend account of Nic Ltd. is $94,000 before any sale of assets under the offer above.

4. The non-eligible refundable dividend tax on hand balance of Nic Ltd. was $18,000 on October 31, 2020.

5. Nicky and Under have agreed to file an election under section 22 of the Income Tax Act for the transfer of the accounts receivable should they eventually agree to a deal.

6. Nic Ltd. has the following tax rates: a) 13% on active business income up to the small business deduction limit (there are no associated companies) b) 40% on other income (before the 10%% additional refundable tax on aggregate investment income and before the refundable Part I tax on investment income)

The corporation will have a nil GRIP balance at the time of a winding-up.

7. Nicky pays personal tax at the top marginal combined federal and provincial rate of 42.5% on actual dividends from the low-rate income of a CCPC and 50% on all other income.

8. Nicky utilized all of his capital gains exemption on a previous sale of the shares of a qualified small business corporation.

Required: Advise Nicky as to which offer will provide him with the most after-tax funds.