Question
The following information relates to XY for its taxation year that ends on December 31, 2020: The Company has UCC balances on January 1, 2020
The following information relates to XY for its taxation year that ends on December 31, 2020:
The Company has UCC balances on January 1, 2020 for its assets as follows:
Class 1 (4%) $478,695
Class 8 (20%) 243,000
Class 10 (30%) 126,000
Class 13 (SL) 127,500
Class 14 (SL) 35,520
Class 17 (8%) $18,000
The only asset in class 1 is a building that was acquired in 2008. In 2020, the building was sold for cash of $650,000. Of this total, $125,000 represented the value of the land on which the building was situated. The building had been purchased in 2008 for $625,000, of which $80,000 represented the value of the land at the time the building was acquired.
In 2020, the Company purchased office furnishings (Class 8) for $74,000. They traded in older furnishings and received a trade-in allowance of $17,000. The capital cost of the furnishings that were traded in was $56,000.
In 2020, a Camry (Class 10.1, 30%) was purchased to be used by the president of the Company. The cost of this car was $93,000. The president drives it 23,000 kilometers during the year, of which 5,750 kilometers are for employment-related purposes.
XY conducts some of its business out of a building which it leases. The lease was signed on January 1, 2018, and had an initial term of 7 years. It has an option to renew for 3 years. At the time the lease was signed, XY spent $150,000 on leasehold improvements . In early January of this year, XY made further improvements (Class 13), costing a total of $50,000.
The asset in class 14 is a limited life franchise that was purchased for $62,000 in 2016. When it was purchased on August 1, 2016, it had a life of 8 years. In May1 2020, copyright (Class 14) with a 25-year legal life was purchased for cash of $120,000.
The only asset left in class 17 is a water tank which is sold during 2020 for proceeds of $16,500. The tank was originally purchased for $22,000.
Required: Calculate the maximum CCA write-off that can be deducted for 2020 and the UCC balances on December 31, 2020. In addition, indicate the amount of any recapture, terminal loss, taxable capital gains and allowable capital losses that result from dispositions during 2020.
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