During its year ended December 31, 2012, Power Boat Corporation Ltd. sold its retailing facilities in Kingston. As the sale occurred in December, business activity was at a low. New facilities were purchased in February 2013 in Parry Sound on the shores of Georgian Bay. The corporation sold its Kingston land and building for $300,000 and $200,000, respectively. This land and building had a cost in 1996 of $50,000 and $100,000, respectively. At the end of 2011, the building had an undepreciated capital cost of $55,000 for income tax purposes. In Parry Sound, the corporation purchased land and building for $75,000 and $350,000, respectively.
REQUIRED
(A) Prepare two calculations of the income tax consequences of the above move, one without an ITA: 44(6) election for additional deferral and one with this election.
(B) If the property disposed of by the corporation in 2012 had been an apartment building held for rental purposes and producing income from property:
(i) What would the tax consequences of a sale of the property have been after a replacement of the property with another apartment complex in 2013?
(ii) What would the tax consequences on an expropriation have been after a replacement of the property with another apartment complex in 2013?