QUESTION 3 (20 marks) In which of the following examples has the continuity of ownership test been met so that the company may carry forward a tax loss? Give brief reasons. Assume that in the first-mentioned year the shares - all of the one class were beneficially owned by the various shareholders and represent a loss year. Further, in the second-mentioned year the company is attempting to claim a deduction for the prior year loss. Loss year Claim year 1): Shareholder B 25% 40% 35% 45% 10% 45% 2): Y z 10% 45% 45% 55% 45% 3): R S 15% 40% 45% 15% 20% 10% 55% U 4): 20% . B 5% 10% 55% 30% 5% 20% D 5): E H 25% 55% 40% 25% 10% 20% 5% 15% J K L 60% 6): M 20% 20% 20% 20% 20% 40% 40% 20% ZOO 7): 51% A B D 51% 9% 40% 49% Would your answer in item 7 be different if you were told that A had arranged with D to hold the 51% share until the company had recouped its prior year losses, A then being free to sell the shares to whomever? QUESTION 3 (20 marks) In which of the following examples has the continuity of ownership test been met so that the company may carry forward a tax loss? Give brief reasons. Assume that in the first-mentioned year the shares - all of the one class were beneficially owned by the various shareholders and represent a loss year. Further, in the second-mentioned year the company is attempting to claim a deduction for the prior year loss. Loss year Claim year 1): Shareholder B 25% 40% 35% 45% 10% 45% 2): Y z 10% 45% 45% 55% 45% 3): R S 15% 40% 45% 15% 20% 10% 55% U 4): 20% . B 5% 10% 55% 30% 5% 20% D 5): E H 25% 55% 40% 25% 10% 20% 5% 15% J K L 60% 6): M 20% 20% 20% 20% 20% 40% 40% 20% ZOO 7): 51% A B D 51% 9% 40% 49% Would your answer in item 7 be different if you were told that A had arranged with D to hold the 51% share until the company had recouped its prior year losses, A then being free to sell the shares to whomever