You have been approached by one of your clients, Mr. Sidney Chow, for help in determining what will be the tax consequences if he sells all his assets in his corporation (at their fair market value) in 2008 to someone who will continue the business. However, Mr. Chow is not sure if he should wind up his corporation at this time. The following tax balance sheet for Chow Enterprises Ltd. has been prepared as at December 31, 2008.

Additional Information
(1) Mr. Chow owns all the common shares of the corporation, which he acquired in 1995 for $20,000 when the business was incorporated.
(2)

Goodwill was acquired in 1998 in connection with a similar business which was purchased that year. The fair market value reflects the goodwill for the combined businesses. The maximum amortization has been deducted for tax purposes.
(3) The corporation is taxable at a total 20% corporate tax rate for the first $300,000 of active business income and a 40% rate for any other income, plus the 62/3% additional refundable tax on investment income. The corporation has a GRIP balance of nil.
(4) The accounts receivable are to be sold to a factoring company.
REQUIRED
(A) Compute the effect of the sale of the above assets on the various tax accounts in 2008, ignoring any potential normal business transactions.
(B) If Mr. Chow should decide to wind up beginning in 2009, ignoring any subsequent business transactions,
(i) Determine the components of the distribution to him; and
(ii) Compute the taxable capital gain or allowable capital loss on the disposition of Mr. Chow's shares.
(C) Indicate briefly the tax consequences of leaving the proceeds in the corporation and investing the money in high-yielding securities.
(D) Discuss the GST implications on the sale of assets and the subsequent winding-up.

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Chow Enterprises Ltd. BALANCE SHEET as at December 31, 2008 Cash. RDTOH. S 10,000 5,000 Accounts receivabl S 30,000 Less: reserve for doubtful debts Land.... Building (Class1)UCC Equipment (Class S- UC Shares in Bell Canadacost Goodwill-cumulative eligible capital balance.. 5,000 25,000 55,000 95,000 12,000 15,000 Future income taxes Common shares-PUC Capital dividend account. Other sulus. S 235000 35,000 12,000 20,000 8,000 160.000 S 235,000 ssets Cost 30,000 S 18,000 FMV Land Building-Class... Equipment Class 8 55,000 150,000 170,000 320,000 0,000 3,000 res in Goodwil... 50,000 120,000