Zoe owns all the shares of Z Ltd., a Canadian-controlled private corporation, carrying on a shoe importing

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Zoe owns all the shares of Z Ltd., a Canadian-controlled private corporation, carrying on a shoe importing business. Zoe is ready to retire and would like to sell her shares of Z Ltd. to a group of long-term, trusted employees. The employees do not have the funds or the borrowing power to purchase the shares of Z Ltd. for their current value, $2,000,000. Zoe has been told that she may be able to complete the sale to the employees by reorganizing of share capital of Z Ltd. Income tax reference: ITA 86.
Provide Zoe with an explanation of how a reorganization of the share capital of Z Ltd. can help her make the sale.
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Related Book For  book-img-for-question

Canadian Income Taxation Planning And Decision Making

ISBN: 9781259094330

17th Edition 2014-2015 Version

Authors: Joan Kitunen, William Buckwold

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