Max disposed of two residential properties during the year. The details of the dispositions are as follows:

Proceeds…………………Cost……………….. Years Owned

Cottage……………………………………$550,000…………………$250,000……………2017-2021

House………………………………….…$750,000………………….$300,000……………2012-2021

What is the minimum taxable capital gain that must be included in Max’s 2021 personal tax return?

X Ltd. is a CCPC that manufactures small equipment, was incorporated in 2005, and had the following balances in its records concerning its capital assets as of January 1^st. 2021:-

CCA

Class……………………………………UCC

Types of asset:

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Building…………………………………………………………#1(4%)……………………………..$568,000

Equipment……………………………………………………….#8(20%)……………………………...39,000

Trucks for transportation………………………………………..#10(30%)…………………………….170,000

Leasehold Improvements……………………………………….#13(S.L.)……………………………..165,000

Licenses………………………………………………………..#14…(S.L)…………………………….. 87,393

Intangibles……………………………………………………..#14.15%)……..………………………… NIL

Additional Information:-

(1) The Class 13 assets consist of:-

-Improvements to a leased warehouse costing $100,000 in 2020. The remaining length of the lease in 2020 was six years with two successive options of four years

-Improvements to leased office space for head office downtown, costing $81,600 in 2019. The remaining length of the lease was five years with an option to renew for an additional one year.

(2) The licenses were purchased to start on April 22, 2019, at a cost of $110,500 and had a life of five years.

(3) During 2021, the company had the following capital transactions:-

Additions:-

-Paved parking lot for employees(C#178%)……………………………………………… 97,000

-Erected a steel fence around an outside storage area…(Cl#6-10%)…………………….. 65,000

-Paid $31,500 in legal fees in reorganizing the capital structure:

Disposals:-

Cost………………Book Value……………Proceeds

Equipment Office…(Cl#820%)………………………………$16,250…………..…$4,225……………...$1,950

Brick building in Class #1(excluding land)(Cl4%%) .$1,400,000…………..900,000……………..568,000

Required:-

Prepare a schedule for tax purposes to reflect the above transactions and calculate the maximum write for tax purposes.

Answer rating: 100% (QA)

The minimum taxable capital gain that must be included in Maxs 2021 personal tax return is 100000 CC... View the full answer