Matthew owns 75 acres of farm land in rural Saskatchewan. It was purchased for $160,000 in 2013 and is all used to farm corn. Matthew has a prospective purchaser for 30 acres of the land who is willing to pay $120,000. Calculate the impact on Matthew's taxable income if he were to sell.

Deduction is Lesser of:

1) Unpaid Proceeds Capital

Total Proceeds Gain

and

2) Year 1 4/5 of the gain

Year 2 3/5 of the gain

Year 3 2/5 of the gain

Year 4 1/5 of the gain

Year 5 No reserve