SSP 14-2 Acquisition of Control Rules-Losses On May 1, 2021, Ontario Lawn Care Ltd. (OLC), which provides gardening and lawn services for the southern Ontario market, purchased, from an unrelated person, all of the shares of Lawn Fertilizer Inc. (LF), a company in the business of manufacturing lawn fertilizers. LF has a December 31 year end. A highly competitive fertilizer market has resulted in the following business losses for LF: Year 2019 2020 Non-Capital Loss $180,000 140,000 Net Capital Loss $65,000 Nil It is estimated that business losses of $125,000 for the 2021 year will be expected. This is made up of an actual loss of $55,000 up to April 30, 2021, and an estimated loss of $70,000 for the remainder of the year. Relevant values for LF's properties on May 1, 2021, were as follows: Relevant values for LF's properties on May 1, 2021, were as follows: UCC Asset Inventory Land Class 1-Building Class 8-Furniture Class 53Manufacturing equipment Cost $100,000 450,000 675,000 25,000 500,000 N/A NA $515,000 10,000 375,000 FMV $105,000 925,000 650,000 15,000 285,000 Required: A. Describe the general income tax implications resulting from the acquisition of control. B. Indicate the elections that could be made to increase income during the short fiscal period ending April 30, 2021, for the purposes of using loss balances. C. Assume that LF is confident of having sufficient business income in the future to absorb any non-capital loss balances restricted by the acquisition of control. Advise the company as to any elections that should be made and determine the amount and type of any loss carry forwards that will be available to be claimed in subsequent taxation years. D. Assume that LF is not confident of having sufficient business income in the future and would like to minimize any non-capital loss balances restricted by the acquisition of control. Advise the company as to any elections that should be made and determine the amount and type of any loss balances that will be available in subsequent taxation years. SSP 14-2 Acquisition of Control Rules-Losses On May 1, 2021, Ontario Lawn Care Ltd. (OLC), which provides gardening and lawn services for the southern Ontario market, purchased, from an unrelated person, all of the shares of Lawn Fertilizer Inc. (LF), a company in the business of manufacturing lawn fertilizers. LF has a December 31 year end. A highly competitive fertilizer market has resulted in the following business losses for LF: Year 2019 2020 Non-Capital Loss $180,000 140,000 Net Capital Loss $65,000 Nil It is estimated that business losses of $125,000 for the 2021 year will be expected. This is made up of an actual loss of $55,000 up to April 30, 2021, and an estimated loss of $70,000 for the remainder of the year. Relevant values for LF's properties on May 1, 2021, were as follows: Relevant values for LF's properties on May 1, 2021, were as follows: UCC Asset Inventory Land Class 1-Building Class 8-Furniture Class 53Manufacturing equipment Cost $100,000 450,000 675,000 25,000 500,000 N/A NA $515,000 10,000 375,000 FMV $105,000 925,000 650,000 15,000 285,000 Required: A. Describe the general income tax implications resulting from the acquisition of control. B. Indicate the elections that could be made to increase income during the short fiscal period ending April 30, 2021, for the purposes of using loss balances. C. Assume that LF is confident of having sufficient business income in the future to absorb any non-capital loss balances restricted by the acquisition of control. Advise the company as to any elections that should be made and determine the amount and type of any loss carry forwards that will be available to be claimed in subsequent taxation years. D. Assume that LF is not confident of having sufficient business income in the future and would like to minimize any non-capital loss balances restricted by the acquisition of control. Advise the company as to any elections that should be made and determine the amount and type of any loss balances that will be available in subsequent taxation years