Reconsider the facts of the previous example problem. Assume that the problem raised by the marketable securities has been resolved by removing the marketable securities from the corporation. Also, assume that the relative proportion of assets held at December 31, 2016 has not changed in the last five years.

Data from in previous example 

REQUIRED

Determine whether the shares are eligible for the capital gains exemption, assuming:

(1) The shares were acquired on incorporation 20 years ago, and

(2) The shares were acquired from the brother of Maya in blocks of 200 shares annually for the last five years.

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A Qualified Small Business Corporation Share is: • at any time (i.e., determination time) • typically at time of disposition or deemed disposition; • a share that meets the following tests: