XT Inc. is a Canadian -controlled private corporation operating a retail business. Its fiscal year...
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XT Inc. is a Canadian -controlled private corporation operating a retail business. Its fiscal year end is December 31. On October 1, 2019, the controlling shareholder sold all of her XT shares to YY Inc. YY is not related to XT. As of September 30, 2019, XT had net income from business of $400,000. A review of XTs balance sheet revealed the following:
| Cost | Undepreciated Capital Cost | Market value | |
| Inventory | 600,000 | 0 | 550,000 |
| Investment in shares of a CCPC | 100,000 | 0 | 20,000 |
| Land | 100,000 | 0 | 400,000 |
| Building | 600,000 | 420,000 | 700,000 |
At the end of the previous year, XT had a net capital loss for tax purposes of $30,000 incurred in 2017.
Required:
Indicate the tax implications for XT from the change in ownership
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