On May$1,$

$20242024,$

OntarioOntario

Lawn Care Ltd$.($OLC$),$ which provides gardening and lawn services for the southern Ontario$$ market, purchased from an unrelated person all of the shares of

LawnLawn

Fertilizer Inc.$($LF$),$ a company in the business of manufacturing lawn fertilizers. LF has a$$ calendar$-$based December $31$ taxation$$ year$-$end.

View the information about LF$\text{'}$s losses.

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$$View the information about LF$\text{'}$s properties.

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Read the requirements.

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Question content area bottom

Part $1$

Requirement A$.$ Determine the general income tax implications resulting from the AOC.

Identify the consequences of the AOC. Select all that apply.

A$.$

For the first taxation year after the$$ AOC, must use a new taxation$$ year$-$end on April $30.$

B$.$

For the first taxation year after the$$ AOC, LF can choose a new taxation$$ year$-$end on any date up to $53$ weeks after the deemed taxation$$ year$-$end.

C$.$

An additional taxation year will be counted toward the expiry of the$$ non$-$capital losses.

D$.$

All of the usual$$ year$-$end procedures will have to be carried out on April$30,$

$20242024.$

E$.$

Any$$ non$-$capital loss balance that is carried forward can only be used against income from the loss business and other businesses that are similar.

F$.$

If CCA is to be$$ claimed, the full amount can be claimed for all of

$20242024.$

G$.$

Any net capital loss balance that remains cannot be used in a taxation year subsequent to the deemed taxation$$ year$-$end resulting from the AOC.

H$.$

LF will have a deemed taxation$$ year$-$end on April$30,$

$20242024.$

I.

LF will have a deemed taxation$$ year$-$end on December$31,$

$20242024.$

J$.$

If CCA is to be$$ claimed, it will have to be prorated for a short taxation year.