identity 2 issue or risk for each

1) No Luck Enterprises

Joe from Noluck Enterprises has come to you with advice. His company Noluck has a December 31 year end and on March 20, 20X6 the company's warehouse was destroyed by fire. The original cost of the warehouse was $120,000. At the time of the fire, the warehouse was valued at $300,000 and was insured. Class 1 had a UCC balance of $95,000 at December 31, 20X5. Noluck was forced to lease a warehouse until a new one could be acquired. On November 30, 20X8, Noluck purchased a new warehouse costing $325,000. Assume the new warehouse was constructed after May 18, 20X7.

Joe heard from his neighbour something about replacement property rules.What is this?

2) Tom Sale of Building to spouse

In the current year, Tom sold a building which he owned personally to a corporation wholly owned by him and his wife. The corporation paid Tom $400,000 for the building. Tom purchased the building some years ago for $250,000. The UCC of the building at the beginning of the current year was $200,000. Tom does not deal at arm's length with the corporation.

Determine the tax consequences for Tom and the corporation. Income tax reference: ITA 13(7)(e); Reg 1100(2.2).

3) Kristin's Sale of Land and Building

Kristin owns a rental property. She purchased the land for $200,000 and built the building at a time when construction costs were high. Her total cost for the building is $400,000. In the current year she sold the rental property for $450,000 (land $300,000; building $150,000). At the beginning of the year the UCC of the building was $320,000.

Determine the amount to be included in Kristin's income with respect to the sale of the rental property. Income tax reference: ITA 13 (21.1).