Andy Marcus is the sole shareholder of Marcus Ltd., a Canadian-controlled private corporation.
The common shares of Marcus Ltd. have a fair market value of $300,000, an ACB of $50,000, and a PUC of $1,000.Through an amendment to the Articles of Marcus Ltd. all of the common shares are converted to preferred shares redeemable for $300,000 in the course of a reorganization of share capital.
Required:
Indicate the tax consequences of the transaction for Andy.