Shelby owns 100% of Fit R Us (Fit) Ltd. The paid-up capital and ACB of the shares are $3,500. The company is a wholesaler of home exercise equipment. After running this business for 20 years, Shelby is looking forward to her next adventure. She would like to sell the assets in the business and use the funds towards her new coaching business. Fits sales were $2,500,000 on average for the past three years. Income before tax was on average $500,000. Normally active business income is bonused down to the business limit. Therefore, Fit is eligible for the SBD.

After getting the word out in the industry that she was on the market to sell she has received an interesting offer from Emilie. Emilie, I willing to pay fair market value for the assets but will not assume any of the liabilities. The FMV will be determined based on an independent valuation of the assets.

Shelby has provided you with the following information about the assets and liabilities of Fit:

	Cost	UCC	FMV
AR	$145,000		$99,000
Inventory (exercise)	$199,000		$255,000
Equipment	$38,000	$28,000	$21,000
Building (used for machines)	$350,000	$250,000	$295,000
Land	$400,000		$700,000

Note 1 the balance is net of an allowance of $15,000; no section 22 election was made on the receivables.

Shelby has also provided you with some of Fits relevant tax balances and carryforward items from its 2019 notice of assessment:

• NERDTOH & ERDTOH = nil
• CDA = nil
• GRIP = nil

Fits corporate tax rates are as follows:

• The combined federal and provincial tax rate on active business income = 13% (income up to the available business limit)
• The combined federal and provincial tax rate on active business income = 27% (income above the available business limit)
• Aggregate investment income = 50 2/3%

You have collected some information on Shelbys tax situation.

• Marginal tax rate = 45%
• Federal dividend tax credit = 9/13 of the gross up
• Provincial dividend tax credit = 3% of the actual amount of the dividend
• Shelby has never used her lifetime capital gains exemption

REQUIRED:

Calculate the after-tax cash kept by Shelby if Emilie purchases the assets and the after-tax cash would be used by Shelby to wind-up Fit.