Question 1 Mr Green makes numerus purchases of his favorite stock, ACME limited. Over the past 2 year the following purchases took place Shares Purchased Ter Shop Value January 15, 2019 Fun An Wanit 12,9019 runs -100 1495 lur. 2019 3611 1527 February 14, 200 Parc 815 1295 Caher 1.212.1 Punch 25 152 As Mr. Can sometimes unsure of this stock. he did he so calls on the past 2 years Shares Selling price per share $15 15 310 May 1, 2017 sale September 20119 sale May 21, 2.00 sals December 1, 2Sale 390 250 1175 156) Determine Mr.larks taxable capital gains losses for 2019 and 20030 and the cost of the shares he is on hand at the end of 2020 Question 2 LIR IK is trucking while in Halifata stof million dollars, penting 23 of land. The owner of the company, Mr. Roo. is looking to relocate the Cape Breto company to Halifax in the future to this papa build a new promise this site sometime over the next 2-3 years. When the pandemic hit he belimesis plans may change. However, he is very fortunate as turns out that the purchase price at the land was a very favorable deal from the conpany and he is being told that it he dacsokkalele muld easily sell the land for a nice pralit. Latein 2020, he wanted to reduce his risk so be decided to sell 10 ses at a price of $3.300.000 and he will Sweep the 13 acres lett for a future more. In order to tacilitate the sale, UR takes back a $3.0 million turst mortgage on the property .he mortgage will be paid in arzual installments on each. beginning in 2021. UR now is getting ready to determine the more inclusion from this transaction as he has been told that it may be determined that the land sale would result in business incume rather than capital gain income. Required-UR has sought your advice as the propriate tax treatment of the sile transaction Provide the required advice as to the proper income treatment and what the taxable income difference would be merch UR new is getting ready to determine the income inclusion from this transaction as he has been told that it may be determined that the land se would result in business income rather than capital gain income Kequired: UR has sought your advice as the aparapriate tax treatment of the sale transaction. Frovide the required advice as to the paper inne treatment and what the taxable income difference would be under sich sonra Question 3 Fact of the following independent Care Clescribes a situation with proposal tax trement 1. George Tanesh Owned a 2 acre parcel of land for a number of years. He had acquired this tard foe $230,000 with the intentio eventually building a bome on the property. However, he received an oder S425,000 to 7 cics of the properly. Because this 75 has watertreat and better read access, he believes that the far market value of the remaining 125 acres al 175,000. He accepts the octer and plans to be an adjusted cost base of $177.63||$250,000||$425,000 + ($425,000+ $175.000 in calculating this gain a lass, | 2. Charlie Pride sells a capital property with an adjusted cost base of S45,000 for $135,000. The $135.000 price includes a arranty co the property which he anticipates will cost him 35,000 to service. He does not antcipate any of the warranty costs will be incurred in the current taxation year. I le plans to recognize a capital gain or the transaction of S15,000 3. During the current year Ms. June Cash sold her sailboat to an arm's length party for $71,000. She had purchased the bout several years ago for 5510. Also during the year, she sold securities with ar adjusted cost base of $22.000 for $12.000. She interds to deduct the loss on the securities against tre gair the sit 4. Hillary Snow has owned a netage for a number of your having acquired it for 5125.00 It is currently wrthrine than $500,000. While she has rarely used it, preferring to stay in her penth in the city, she believes that it will continue to increase in vali. Give this, she decides to evert it to a rental property. While she plans to mwport hefuture rental income to the CRA, she does not pa tamne a ganar kesam the site of the property Sime no disposition has taken place 5. During the current year Mr. Raporssells a non-depreciable capital issed for 5216.00. The adjusted cost base of the assct was S194,000, resulting in a capital galnod 32.000. Linder the terms of the sale, he will receive 111 percent ($21,6001 of the proceeds in the curent year, with the remaind being due carly in the following year. As a result, be will recognize S2.200 of the capital gain in the current year. Required: In each of the preceding Cases, indicate whether or not yo believe that the tax treatment being proposed is the correct one. Explain your conclusiec Question 1 Mr Green makes numerus purchases of his favorite stock, ACME limited. Over the past 2 year the following purchases took place Shares Purchased Ter Shop Value January 15, 2019 Fun An Wanit 12,9019 runs -100 1495 lur. 2019 3611 1527 February 14, 200 Parc 815 1295 Caher 1.212.1 Punch 25 152 As Mr. Can sometimes unsure of this stock. he did he so calls on the past 2 years Shares Selling price per share $15 15 310 May 1, 2017 sale September 20119 sale May 21, 2.00 sals December 1, 2Sale 390 250 1175 156) Determine Mr.larks taxable capital gains losses for 2019 and 20030 and the cost of the shares he is on hand at the end of 2020 Question 2 LIR IK is trucking while in Halifata stof million dollars, penting 23 of land. The owner of the company, Mr. Roo. is looking to relocate the Cape Breto company to Halifax in the future to this papa build a new promise this site sometime over the next 2-3 years. When the pandemic hit he belimesis plans may change. However, he is very fortunate as turns out that the purchase price at the land was a very favorable deal from the conpany and he is being told that it he dacsokkalele muld easily sell the land for a nice pralit. Latein 2020, he wanted to reduce his risk so be decided to sell 10 ses at a price of $3.300.000 and he will Sweep the 13 acres lett for a future more. In order to tacilitate the sale, UR takes back a $3.0 million turst mortgage on the property .he mortgage will be paid in arzual installments on each. beginning in 2021. UR now is getting ready to determine the more inclusion from this transaction as he has been told that it may be determined that the land sale would result in business incume rather than capital gain income. Required-UR has sought your advice as the propriate tax treatment of the sile transaction Provide the required advice as to the proper income treatment and what the taxable income difference would be merch UR new is getting ready to determine the income inclusion from this transaction as he has been told that it may be determined that the land se would result in business income rather than capital gain income Kequired: UR has sought your advice as the aparapriate tax treatment of the sale transaction. Frovide the required advice as to the paper inne treatment and what the taxable income difference would be under sich sonra Question 3 Fact of the following independent Care Clescribes a situation with proposal tax trement 1. George Tanesh Owned a 2 acre parcel of land for a number of years. He had acquired this tard foe $230,000 with the intentio eventually building a bome on the property. However, he received an oder S425,000 to 7 cics of the properly. Because this 75 has watertreat and better read access, he believes that the far market value of the remaining 125 acres al 175,000. He accepts the octer and plans to be an adjusted cost base of $177.63||$250,000||$425,000 + ($425,000+ $175.000 in calculating this gain a lass, | 2. Charlie Pride sells a capital property with an adjusted cost base of S45,000 for $135,000. The $135.000 price includes a arranty co the property which he anticipates will cost him 35,000 to service. He does not antcipate any of the warranty costs will be incurred in the current taxation year. I le plans to recognize a capital gain or the transaction of S15,000 3. During the current year Ms. June Cash sold her sailboat to an arm's length party for $71,000. She had purchased the bout several years ago for 5510. Also during the year, she sold securities with ar adjusted cost base of $22.000 for $12.000. She interds to deduct the loss on the securities against tre gair the sit 4. Hillary Snow has owned a netage for a number of your having acquired it for 5125.00 It is currently wrthrine than $500,000. While she has rarely used it, preferring to stay in her penth in the city, she believes that it will continue to increase in vali. Give this, she decides to evert it to a rental property. While she plans to mwport hefuture rental income to the CRA, she does not pa tamne a ganar kesam the site of the property Sime no disposition has taken place 5. During the current year Mr. Raporssells a non-depreciable capital issed for 5216.00. The adjusted cost base of the assct was S194,000, resulting in a capital galnod 32.000. Linder the terms of the sale, he will receive 111 percent ($21,6001 of the proceeds in the curent year, with the remaind being due carly in the following year. As a result, be will recognize S2.200 of the capital gain in the current year. Required: In each of the preceding Cases, indicate whether or not yo believe that the tax treatment being proposed is the correct one. Explain your conclusiec