ed Khan owns Khan Development Inc. During 20X7, the following transactions took place: Transaction A Khan acquired a parcel of land for $10,900,000 (plus 4% in real estate commissions). On closing, Khan paid $44,900 in legal fees as well as $22,800 in back taxes owed on the property. The land would be used to build new semi-detached and row townhouses. Immediately following the purchase, Khan submitted a proposal to the municipality to rezone the property to residential use. Legal fees and other admin costs associated with the rezoning permits were $54,000. Upon approval, Khan completed grading and added new drainage that was required as part of the approval. The total cost of this work was $168,000. Transaction B Khan also acquired another nearby parcel of land, already zoned as residential for $1,580,000. The land had two houses that were inhabitable in their current state. Khan planned to use this site to build their sales office and showrooms for the sites above. The land had a fair value of $1,440,000 and the building value(s) were $140,000. Khan demolished the buildings for a total of $64,000. Khan incurred the following expenditures when constructing the showrooms: The building was completed and occupied on 30 September 20X5. Transaction C Khan purchased a variety of new tools, that will be required as part of the construction of the properties. This included 2 bobcats/diggers that had a cost of $440,000, and some other tools that added up to $34,000 (inclusive of $1,700 of HST). The diggers were shipped from the United States for a total cost of $3,300. Khan paid $4,000 in import duties on these as well in addition to $24,000 in HST. Building (exterior and materials) $828,000 Excavation fees 28,600 Building permits 18,900 Architectural design fees 44,000 Borrowing costs during construction 8,900 Driveways/parking lots 71,000 Landscaping 37,000