Sundown Inc. is a Canadian controlled private corporation. After disposing of all of its assets and paying all of its liabilities, including Tax Payable resulting from the asset dispositions, Sundown Inc. is left with cash of $2,854,500. The PUC of the Company's shares is equal to their adjusted cost base, an amount of $290,400. After the sale of assets, the Company has a Non-Eligible RDTOH account balance of $155,100, a capital dividend account balance of $85,800 and a GRIP balance of nil.
Determine the tax consequences to the shareholders of Sundown Inc. if, during 2020, the Company makes the maximum cash distribution to its shareholders. Assume that appropriate elections will be made to minimize the taxes that will be paid by the shareholders. You are not required to calculate personal tax payable for the shareholders.

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The Answer of Sundown Inc. is a Canadian controlled private corporation. After disposing of all of its assets and paying all of its liabilities, including Tax Payable resulting from the asset dispositions, Sundown Inc. is left with cash of $2,854,500. The PUC of the Company's shares is equal to their adjusted cost base, an amount of $290,400. After the sale of assets, the Company has a Non-Eligible RDTOH account balance of $155,100, a capital dividend account balance of $85,800 and a GRIP balance of nil.
Determine the tax consequences to the shareholders of Sundown Inc. if, during 2020, the Company makes the maximum cash distribution to its shareholders. Assume that appropriate elections will be made to minimize the taxes that will be paid by the shareholders. You are not required to calculate personal tax payable for the shareholders.