rogo dan owns all of the common shares of julie inc which in turn owns all of the sh 4373819

Rogo Dan owns all of the common shares of Julie Inc. which in turn owns all of the shares of two other companies, Opco Inc. and RE Inc. Opco Inc. carries on an active business in Sudbury. RE Inc. owns real estate, of which 100% is used by Opco Inc. in its business. All three corporations are CCPCs. The following are further details: Julie Inc. assets: Shares of Opco Inc. at FMV …………………………………………………. $850,000 Shares of RE Inc. at FMV …………………………………………………….. 800,000 Portfolio investments at FMV ………………………………………………….. 75,000 Opco Inc. assets and liabilities: Active business assets at FMV ………………………………………………. $900,000 Term deposits …………………………………………………………………… 50,000 Liabilities ……………………………………………………………………… 100,000 RE Inc. assets and liabilities: Land and building at FMV ………………………………………………….. $800,000 Portfolio investments at FMV ………………………………………………… 200,000 Mortgage ……………………………………………………………………… 200,000 The proportion of assets in each of the companies has been constant over the past three years. Rogo has owned the shares of Julie Inc. for the past five years. REQUIRED (A) Determine whether Julie Inc. meets each of the three tests necessary for its shares to be qualifying small business corporation shares. (B) If the shares of Julie Inc. are not QSBC shares, then suggest ways of purifying Julie Inc. and indicate the tax consequences of your recommendations. View Solution:
Rogo Dan owns all of the common shares of Julie

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