Knight owns all common shares in KML. PUC= 100,000 ACB=400,000 FMV=1,800,000. wants to freeze the value of KML at 1.8 million by holding non-grwoth debt and preferred shars and having her adult childre own c/s and had 400,000 in QSBC CG exemption.
(A) put in holding company in exchange for 1 million in p/s and 800,000 in debt, what are the tax consequences?
i) what if sold to arms length person for FMV
ii) what if redeemed by the holding corp for FMV
B) what if Knight does a reorganization of capital for the 800k in debt and 1m in p/s 1= LSC and FMV, what are these tax consequences
ii) what if sold to arms length person
ii) redeemed by hoding corp for FMV