Ms. Laura Cooper is the sole shareholder of Cooper Inc. It is a Canadian controlled private corporation and its common shares have a fair market value of $2,950,000, an adjusted cost base (ACB)of $1,375,000, and a paid up capital (PUC)of $1,375,000. At this time, Cooper Inc. has no balance in its GRIP account. Ms. Cooper exchanges all of her Cooper Inc. shares for cash of $1,375,000 and preferred shares that are redeemable for $1,575,000.
Determine the ACB and the PUC of the redeemable preferred shares. Indicate the amount, and type, of any income that will result from this transaction. Show your calculations.

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The Answer of Ms. Laura Cooper is the sole shareholder of Cooper Inc. It is a Canadian controlled private corporation and its common shares have a fair market value of $2,950,000, an adjusted cost base (ACB)of $1,375,000, and a paid up capital (PUC)of $1,375,000. At this time, Cooper Inc. has no balance in its GRIP account. Ms. Cooper exchanges all of her Cooper Inc. shares for cash of $1,375,000 and preferred shares that are redeemable for $1,575,000.
Determine the ACB and the PUC of the redeemable preferred shares. Indicate the amount, and type, of any income that will result from this transaction. Show your calculations.

Ms Laura Cooper Is the Sole Shareholder of Cooper Inc