Answered step by step
Verified Expert Solution
Question
1 Approved Answer
CHECK FIGURES AP 5-7 tips and check figures: Class 8 Furniture: recapture $12,000 Class 1 Old Building: recapture 73,000. Taxable capital gain 8,500. Class 1
CHECK FIGURES AP 5-7 tips and check figures: Class 8 Furniture: recapture $12,000 Class 1 Old Building: recapture 73,000. Taxable capital gain 8,500. Class 1 New Buidling: at 6%; UCC Jan 1, 2024 $864,500 Class 10 Auto: terminal loss $35,000
AP 5-7 (CCA, Recapture, and Terminal Losses-Includes Taxable Capital Gains) On January 1, 2021, the beginning of its taxation year, Bard Ltd. has the following information with respect to its depreciable property: During the 2021 taxation year, the following transactions occur: Sale of Furniture Furniture with a capital cost of $52,000 was sold for $36,000. There are still property in class 8 on the last day of the taxation year. Purchase and Sale of Buildings A new building was acquired on February 1, 2021, with a capital cost of $325,000. Of this total, $75,000 was the estimated value of the land on which the building was situated with the building valued at $250,000. All of the floor space of the building will be used 100% for office space and is placed in a separate class 1. A timely election was filed to include the building in a separate class 1. Also during the year, a building (including the land) with a capital cost of $335,000 was sold for $352,000. Of the $352,000 received, $200,000 is for the land on which the building is situated and the remaining $152,000 for the building. The adjusted cost base of the land was equal to the $200,000 proceeds of disposition. Sale of Automobiles An extensive analysis of capital and operating costs indicated that the company would be better off leasing automobiles rather than purchasing them. As a consequence, all of the company's automobiles were sold on December 28, 2021, for a total of $185,000. None of the automobiles were sold for more than its original cost. The leased vehicles were delivered on January 2, 2022. Required: For the taxation year ending December 31, 2021, calculate the maximum CCA that can be deducted by Bard Ltd. for each CCA class. In addition, calculate the January 1, 2022, UCC balance for each class. As part of your answer, you should indicate whether there are any other income tax consequences as a result of any of the transactionsStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started