Problem 6 The president of Purchaser Inc. (Purchaser) is planning to have the company acquire all the shares of Target Inc. (Target) on September 1, 2019. He has asked you to calculate what losses will be available in Target after he acquires it and explain the future deductibility of those losses after the purchase. Target manufactures paper products, whereas Purchaser is a wholesaler of office supplies and equip- ment. Both companies are Canadian-controlled private corporations and have August 31 year ends. The loss carryovers of Target are expected to be as follows: Net Capital Losses $ 50,000 2015 2016 2017 2018 2019 Non-Capital Losses $300,000 250,000 200,000 150,000 50,000 100,000 On August 31, 2019, Target will have the following assets which are still on hand: UCC FMV Cost or Capital Cost 1,000,000 Manufacturing Equipment NIL 300,000 Problem 6 The president of Purchaser Inc. (Purchaser) is planning to have the company acquire all the shares of Target Inc. (Target) on September 1, 2019. He has asked you to calculate what losses will be available in Target after he acquires it and explain the future deductibility of those losses after the purchase. Target manufactures paper products, whereas Purchaser is a wholesaler of office supplies and equip- ment. Both companies are Canadian-controlled private corporations and have August 31 year ends. The loss carryovers of Target are expected to be as follows: Net Capital Losses $ 50,000 2015 2016 2017 2018 2019 Non-Capital Losses $300,000 250,000 200,000 150,000 50,000 100,000 On August 31, 2019, Target will have the following assets which are still on hand: UCC FMV Cost or Capital Cost 1,000,000 Manufacturing Equipment NIL 300,000