Required: Indicate the tax consequences to the relevant shareholders of the transaction(s) described in each of the following independent Cases. Tax consequences would include the increase or decrease in the individual shareholder's Taxable income, any change in the adjusted cost base and/or PUC of any shares that are still in the hands of the individual shareholder after the described transaction(s), and any federal dividend tax credits that result from the described transaction(s). Assume that any dividends that arise are non-eligible

Case 1.

Jason Mark owns 15% of the outstanding voting shares of Mark Ltd. These shares were purchased when the Company was formed. At this time, 225,000 shares were sold at a price of $15, resulting in a total PUC of 3375000. One of the Company's creditors has agreed to accept 30000 new Mark Ltd. shares in settlement of debt with a face value of 550000. At this time the Mark Ltd. shares are valued at 20 per share. Shortly after this time, Jason Mark sells all of his Mark ltd. shares for 23 per share.

Case 2

At incorporation, Lason Inc. issued 300,000 commons shares at $32 per share, for a total value of 9,600,000. The original owner later sold these shares to Lawrence Foster for 8,400,000. During the year subsequent to this sale, the company redeemed 50,000 of these shares for 1,700,000.