Frames Inc., a public company, had a warehouse where it stored its inventory of picture frames,...

 

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Frames Inc., a public company, had a warehouse where it stored its inventory of picture frames, but a fire destroyed the Class 1 building in September 2020. The original cost of the building was $800,000 and the UCC value at the time was $540,000. The insurance company decided the building was a write-off and paid Frames Inc. $850,000 for the building in October 2020. Frames Inc. paid $950,000 to construct a new building by November 2021. Required: What is the UCC of the building before CCA to Frames Inc. for its taxation year ended December 31, 2021, assuming they wish to minimize tax and proper election is made? Frames Inc., a public company, had a warehouse where it stored its inventory of picture frames, but a fire destroyed the Class 1 building in September 2020. The original cost of the building was $800,000 and the UCC value at the time was $540,000. The insurance company decided the building was a write-off and paid Frames Inc. $850,000 for the building in October 2020. Frames Inc. paid $950,000 to construct a new building by November 2021. Required: What is the UCC of the building before CCA to Frames Inc. for its taxation year ended December 31, 2021, assuming they wish to minimize tax and proper election is made?

Answer rating: 100% (QA)

UCC of the building before CCA for Frames Inc Scenario 1 Involuntary Disposition with Replacement wi... View the full answer