Question: On January 18th of the current year, J Inc. acquired 85% of the shares of K Inc. from an arms length person. At that time,

On January 18th of the current year, J Inc. acquired 85% of the shares of K Inc. from an arm’s length person. At that time, K Inc. owned two non-depreciable capital assets: Land (Value $250,000; Adjusted cost base $320,000) and Investment in X Inc. (Value $40,000; Adjusted cost base $35,000). What is the amount of the reduction required to the adjusted cost base of the assets?

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