Question One $(13$ marks$)$

On February $1,2024,$ Apex Sports Corporation $($Apex$)$ acquired $100\%$ of the shares of

Velocity Sports Ltd$.($Velocity$)$ Apex is a retailer of sneakers and sports equipment

while Velocity provides management services to online E$-$Sports teams. Velocity has

the following assets:

FMV Cost$/$ACB UCC

Inventory $10,000230,000-$

Company car $($class $10\mathrm{.}1)85,000130,00015,000$

Equipment $($class $8)35,00060,00052,000$

Marketable securities $25,00050,000-$

Goodwill $($class $14\mathrm{.}1)900,000--$

Velocity had non$-$capital losses of $$150,000$ and net capital losses of $$8,000$ at December

$31,2023.$ Velocity also incurred additional losses from regular business operations of

$$20,000$ during January $2024.$

Required

$1)$ Determine the amount of non$-$capital losses and net capital losses available for

use immediately after the acquisition of control. Be sure to analyze any applicable

loss restrictions. Assume that there is no paragraph $111(4)($e$)$ designation made.

$2)$ Determine the impact of making a paragraph $111(4)($e$)$ designation at the deemed

year end immediately before the acquisition of control $($i$.$e$.$ January $31,2024).$ Your

answer should clearly state which asset$($s$)$ should be selected for the designation

and why, the minimum amount of elected proceeds, and explain the benefit of

making a designation.