Jean Hill, a Canadian Resident, Transfers 100 Percent of the Shares

Jean Hill, a Canadian resident, transfers 100 percent of the shares in Hill Inc.to a new company, Jean Ltd.The Hill Inc.shares have an adjusted cost base and PUC of $100,000, and a fair market value of $1,000,000.The transfer is made under the provisions of ITA 85 at an elected value of $850,000.Ms.Hill receives cash of $850,000 and retractable pre- ferred shares with a fair market value of $150,000.What are the immediate tax consequences to Ms.Hill, resulting from this transfer?

A) A capital gain of $900,000.
B) An ITA 84.1(1) deemed dividend of $750,000.
C) An ITA 84.1(1) deemed dividend of $750,000, plus a capital gain of $150,000.
D) A capital gain of $750,000.
Capital Gains Stripping