Danton is the only shareholder of a corporation that has liquidated all of its assets. After paying all of its liabilities, there is $450,000 in cash available for distribution on the winding up. The common shares have a PUC of $45,000, Danton's adjusted cost base is $80,000 and there is a balance in the company's capital dividend account of $51,000. There is no balance in the company's GRIP account. The distribution to Danton is:

Question

Quizplus · Accepted Answer

The distribution includes a capital dividend of $51,000 from the capital dividend account, which is tax-free. The remaining $399,000 ($450,000 - $51,000) is distributed as a taxable non-eligible dividend, not $354,000 as stated in option A. However, given the options provided and the context of the question, option A is the closest to the correct process of distribution, despite the numerical discrepancy.

Danton Is the Only Shareholder of a Corporation That Has