You have been provided with the following information for ABC Company for the taxation year December 31,
Question:
You have been provided with the following information for ABC Company for the taxation year December 31, 2020:
UCC balances on January 1, 2020, for the tangible assets are:
Class 1 (a single building acquired in 2012) $478,695
Class 8 243,000
Class 10 126,000
Class 13 127,500
Buildings – in 2020, the single building acquired in 2012 was sold for $650,000 (this value includes both the building and land). The land value included in that amount is $125,000. The capital cost of the building was $625,000 (this includes both the building and the land). The land value included in that amount is $80,000. 7490
The building (from 2012) was replaced during 2020 with a new building at a cost of $745,000 (building and land). The land value included in that amount was $125,000.
The old building was used 100 percent for office space and was allocated to a separate Class 1. The new replacement building is also used 100 percent for office space and is allocated to a separate Class 1.
Furniture & fixtures – in 2020 ABC purchased office furnishings for $74,000. Some older office furnishings were sold for $17,000. The capital cost of the furnishings was $56,000.
Vehicle - the vehicle purchased in 2020 cost ABC $93,000. The taxpayer using the vehicle drives it 23,000 kilometers during the year, of which 5,750 kilometers are for employment-related purposes.
Limited life franchise – in 2016 a limited life franchise was acquired for $62,000. It has a legally limited life of 8 years.
Required: Calculate the maximum CCA write-off that can be deducted by ACB for 2020. Show your answer by class. Calculate any relevant recapture or terminal loss that results from dispositions during 2020.
Accounting for Governmental and Nonprofit Entities
ISBN: 978-1259917059
18th edition
Authors: Jacqueline L. Reck, James E. Rooks, Suzanne Lowensohn, Daniel Neely