On January 1, 2022, the beginning of its calendar-based taxation year, Bard Ltd. has the followin...

 

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On January 1, 2022, the beginning of its calendar-based taxation year, Bard Ltd. has the followin information with respect to its depreciable property: Property Description Class 8 furniture Class 1 buildings (purchased in 2006) Class 10 automobiles UCC $ 24,000 562,000 220,000 Capital Cost $147,000 846,000 315,000 During the 2022 taxation year, the following transactions occur: Sale of Furniture Furniture with a capital cost of $52,000 was sold for $36,000. There is still property in class 8 on the last day of the taxation year. Purchase and Sale of Buildings A new building was purchased on February 1, 2022 with a capital cost of $325,000. Of this total, $75,000 was the estimated value of the land on which the building was situated with the building valued at $250,000. All of the floor space of the building will be used 100% for office space. A timely election was filed to include the building in a separate class 1. Also during the year, a building (including the land) with a capital cost of $335,000 was sold for $352,000. Of the $352,000 received, $200,000 is for the land on which the building is situated and the remaining $152,000 for the building. The ACB of the land was equal to the $200,000 POD. Sale of Automobiles An extensive analysis of capital and operating costs indicated that the company would be better off leasing automobiles rather than purchasing them. As a consequence, all of the company's automobiles were sold on December 28, 2022, for a total of $185,000. None of the automobiles were sold for more than its capital cost. The leased vehicles were delivered on January 2, 2023. Required: For the 2022 taxation year, calculate the maximum CCA that can be claimed by Bard Ltd. for each CCA class. In addition, calculate the January 1, 2023, UCC balance for each class. As part of your answer, you should indicate whether there are any other income tax consequences as a result of any of the transactions. Assume that any depreciable property purchases meet the conditions to qualify for the Accll and that none of the vehicles are zero-emission. Ignore any GST/ HST or PST considerations. On January 1, 2022, the beginning of its calendar-based taxation year, Bard Ltd. has the followin information with respect to its depreciable property: Property Description Class 8 furniture Class 1 buildings (purchased in 2006) Class 10 automobiles UCC $ 24,000 562,000 220,000 Capital Cost $147,000 846,000 315,000 During the 2022 taxation year, the following transactions occur: Sale of Furniture Furniture with a capital cost of $52,000 was sold for $36,000. There is still property in class 8 on the last day of the taxation year. Purchase and Sale of Buildings A new building was purchased on February 1, 2022 with a capital cost of $325,000. Of this total, $75,000 was the estimated value of the land on which the building was situated with the building valued at $250,000. All of the floor space of the building will be used 100% for office space. A timely election was filed to include the building in a separate class 1. Also during the year, a building (including the land) with a capital cost of $335,000 was sold for $352,000. Of the $352,000 received, $200,000 is for the land on which the building is situated and the remaining $152,000 for the building. The ACB of the land was equal to the $200,000 POD. Sale of Automobiles An extensive analysis of capital and operating costs indicated that the company would be better off leasing automobiles rather than purchasing them. As a consequence, all of the company's automobiles were sold on December 28, 2022, for a total of $185,000. None of the automobiles were sold for more than its capital cost. The leased vehicles were delivered on January 2, 2023. Required: For the 2022 taxation year, calculate the maximum CCA that can be claimed by Bard Ltd. for each CCA class. In addition, calculate the January 1, 2023, UCC balance for each class. As part of your answer, you should indicate whether there are any other income tax consequences as a result of any of the transactions. Assume that any depreciable property purchases meet the conditions to qualify for the Accll and that none of the vehicles are zero-emission. Ignore any GST/ HST or PST considerations.

Answer rating: 100% (QA)

SOLUTION To calculate the maximum Capital Cost Allowance CCA that can be claimed by Bard Ltd for each CCA class and the January 1 2023 UCC balance for each class we need to consider the transactions a... View the full answer