Jonsub Ltd. is a wholly owned subsidiary of Normpar Ltd. Normpar Ltd. plans to merge the two companies, either by amalgamating with the subsidiary [sec. 87] or by winding up the subsidiary [ssec. 88(1)]. The balance sheet of Jonsub Ltd. immediately before the merger is as follows:

Other Information
(1) Normpar Ltd. acquired all of the shares of Jonsub Ltd. for $4,000,000 about 13 years ago. The total amount of dividends paid by Jonsub Ltd. to Normpar Ltd. during the period of ownership is $500,000.
(2) The same marketable securities were owned by Jonsub Ltd. at the time Normpar Ltd. acquired control but the marketable securities had a fair market value of only $800,000 at that time. Normpar Ltd. plans to sell the marketable securities in the next few years.
(3) The fair market value of the land and building at the time Normpar Ltd. acquired control were $1,900,000 and $400,000 respectively.
(4) The fair market value of goodwill developed by Jonsub Ltd. (i.e., not purchased) was $300,000 at the time Normpar Ltd. acquired control and $500,000 immediately before the merger.
REQUIRED
What are the tax consequences to both Jonsub and Normpar on either an amalgamation [sec. 87] or a winding-up [ssec. 88(1)]?

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Assets: S 80,000 300,000 800,000 920,000 1,200,000 300,000 Cash Accounts receivable (net of S30,000 reserve)... Inventoryat cost (FAV S920,000 Land at cost (FMV S2,000,000) Builing at UCC (FMAV S500,000 Equipment at UCC (FMV S150,000) Total current assets... S 3,800,000 Liabilities and shareholder's equity. 709,000 1,000,000 1000 2,090,000 3.800.000 Accounts payable and accrued liabilities L oans payabe. Retained earnings.