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Styles Editing Voice At the beginning of 2010, katie Johnson opened a retail business in rented facilities near her home. As the anticipated losses in

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Styles Editing Voice At the beginning of 2010, katie Johnson opened a retail business in rented facilities near her home. As the anticipated losses in the first couple of years of operation, she did not incorporate. She planned to use these losses to offset her employment income. By January 1, 2015, the business had established itself as a profitable entity, at which point Katie decided to incorporate. The new corporation will be called Johnson inc. and will have a December 31 Year-end. On January 1, 2015, the following values are relevant: Tax Values of Business Assets 842,000 Fair Market Value of Business Assets 1,560,000 On this date, these assets are transferred to the corporation under the provisions of ITA 85(1) at a total elected value of $842,000. As consideration, she receives a note for $360,000, along with 6,000 Johnson Inc. shares with a fair market value of $1,200,000. No other shares of Johnson inc. have been issued. On January 1, 2020 she receives an offer from Casper Ltd. to acquire all 6,000 of the shares of Johnson Inc. in return for 150,000 casper Lid. shares with a fair market value of $2,700,000. Subsequent to this transaction, katie will remain at arm's length with casper utd. Johnson inc. is not a qualified small business corporation. Katie has a $625,000 net capital loss carry forward resulting from the bad decisions in her trading of Canadian public company shares. Required: A. Advise Katie with respect to the tax consequences that would arise for her from accepting the Casper Ltd. offer. Your answer should consider both the application of ITASS. 1 and opting out of this provision. B. Indicate the ACB of the Johnson Inc. shares in the hands of casper Ltd C. Advise Katie as to the alternative approaches that might simultaneously make use of her net capital loss carry forward and minimize her current payment of taxes Focus

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