Kelowna Corporation acquires 100 percent of the shares of its subsidiary Columbia Inc. on October 31, 2013 for $2,750,000. At that time, Columbia Inc. owned one non-depreciable asset, a piece of vacant land with an adjusted cost base of $400,000 and a fair market value of $750,000. Since November 1, 2013, Columbia Inc. has paid dividends of $300,000 to Kelowna Corporation. On October 31, 2020, when the net assets of Columbia Inc. have a tax value of $2,200,000, Columbia Inc. is wound up into Kelowna Corporation under ITA 88(1). What will be the value of the land after the wind-up?

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The Answer of Kelowna Corporation acquires 100 percent of the shares of its subsidiary Columbia Inc. on October 31, 2013 for $2,750,000. At that time, Columbia Inc. owned one non-depreciable asset, a piece of vacant land with an adjusted cost base of $400,000 and a fair market value of $750,000. Since November 1, 2013, Columbia Inc. has paid dividends of $300,000 to Kelowna Corporation. On October 31, 2020, when the net assets of Columbia Inc. have a tax value of $2,200,000, Columbia Inc. is wound up into Kelowna Corporation under ITA 88(1). What will be the value of the land after the wind-up?

Kelowna Corporation Acquires 100 Percent of the Shares of Its