Kathy, a B$.$C$.$ resident, owns all common shares of Cyber Corp, a CCPC$.$ Cyber Corp was incorporated in $2016,$ when Kathy invested $$1,615,000$ into Cyber Corp in exchange for all of its shares. Kathy has owned these shares for the entire period.

Cyber Corp is a computer equipment and video game distributor. Their balance sheet is below: $($look at image$)$

Cyber Sub Inc. is a CCPC which is $25\%$ owned by Cyber Corp. It uses all of its assets in Canadian active business.

The relative values of Cyber Corp$’$s assets have remained stable over the past three years. The marketable securities comprise Cyber Corp$’$s investment portfolio which is not held as part of the corporation$’$s business activities.

On December $31$st $2023,$ Kathy was recently offered $$1,800,000$ for the shares of Cyber Corp.

In the past, Kathy had also invested in the shares of several CCPCs and public corporations. Earlier in $2023,$ Kathy realized a capital loss of $$21,000$ on the sale of public company shares.

She also has a $$4,500$ net capital loss carryforward from prior years that she would like to use in $2023.$

In $2019,$ Kathy had realized $$12,000$ of taxable capital gains from the sale of QSBC shares, and she used $$12,000$ of capital gains deduction in that year. This was the only time she ever used her capital gains exemption.

Kathy had several unsuccessful investments in the past, which gave her a cumulative net investment loss $($CNIL$)$ balance of $$29,800.$ In addition to that, she also realized an allowable business investment loss of $$13,000$ in $2018.$ 

REQUIRED

a$)$ On December $31$st $2023,$ would Kathy be able to claim any capital gains exemption $($CGE$)$ on the sale of Cyber Corp shares? If not, make a recommendation to Kathy as to what Cyber Corp needs to do in order to qualify for the CGE.

b$)$ Assuming that the sale of Cyber Corp shares qualifies for the CGE $($i$.$e$.$ assuming Kathy took your advice in part a$)),$ calculate the capital gains deduction that Kathy can claim for the year $2023.$