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Mr. White owns all 1,000 common shares of White Ltd, with an adjusted cost base (ACB) and paid up capital (PUC) of $1,000. The corporation has been successful and its current FMV is $500,000. Pursuant to ITA 86(1), Mr. White exchanges all 1,000 common shares for non-share consideration of $200,000 and preferred shares with a redemption value of $200,000. Immediately thereafter, Mr. White's only daughter purchases 100 common shares of White Ltd. for a nominal value of $100. ITA 86(2) would deem a gift to Mr. White's daughter of: A. $100,000. B. $1,000. C. $500,000. D. $200,000.
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