Mr. Hal Brook is the only shareholder of HB Ltd., a Canadian controlled private corporation. The shares of the Company have a fair market value of $1,450,000, an adjusted cost base of $400,000, and a PUC of $700,000. The Company has no balance in its GRIP account. At this time, Mr. Brook exchanges all of his HB Ltd. common shares for cash of $700,000 and HB Ltd. preferred shares that are redeemable for $750,000.
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 Mr. Hal Brook is the only shareholder of HB Ltd., a Canadian controlled private corporation. The shares of the Company have a fair market value of $1,450,000, an adjusted cost base of $400,000, and a PUC of $700,000. The Company has no balance in its GRIP account. At this time, Mr. Brook exchanges all of his HB Ltd. common shares for cash of $700,000 and HB Ltd. preferred shares that are redeemable for $750,000.
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.

Mr Hal Brook Is the Only Shareholder of HB Ltd