On March 20, 20X7, Growth Ltd. moved its head office into its newly acquired building in
Toronto. The new building cost $800,000 (land $300,000; building $500,000).The former office building, in downtown Toronto, was sold in January, 20X6 for $650,000 (land $200,000; building $450,000). Growth Ltd. operated from leased space in the meantime. The former office building cost $400,000 (land $150,000; building $250,000). Class 1 had an UCC balance of $220,000 at the end of 20X5. Growth Ltd. has a December 31 year end.
Describe the tax consequences of the move, including the capital cost and UCC for the new building, assuming Growth Ltd. wishes to minimize taxes. Income tax reference: ITA 13(4); 44(1), (5).