Hazel owns all of the shares of H Ltd. Kristin, owns all of the shares of K Ltd. The owners plan to combine their businesses by amalgamating the two corporations on April 1st of the current year. The shares of H have an ACB of $100 and are currently worth $40,000.The shares of K have an ACB of $200 and are currently worth $60,000. H and K are both Canadian corporations.
Describe the tax implications of the amalgamation of H Ltd. and K Ltd. Income tax reference: