Saba Corp. purchased an apartment complex in 2020 for $ 450,000 ($100,000 for the land, $ 350,000 for the building)
Saba Corp. purchased an apartment complex in 2020 for $ 450,000 ($100,000 for the land, $ 350,000 for the building) and sold it in 2021 for $ 460,000 ($ 120,000 for the land, $ 340,000 for the building). $ 7,000 was deducted for CCA in 2020 resulting in a UCC of $ 343,000 at the beginning of the 2021 taxation year. Determine the income tax consequences of the sale for 2021.
Case B: Ms. Linda Udall owns 800 shares of Fordam Inc. that she purchased several years ago at $10 per share. On April 30, 2021, she purchases an additional 200 shares at $12 per share. On July 15, 2021, after Fordam releases unexpectedly bad second quarter results, Ms. Udall sells all 1,000 of her shares at $5 per share. On August 1, 2021, she purchases 200 shares at $1 per share as she believes the market has overreacted to the bad news. Ms. Udall continues to own the shares at December 31, 2021. What are the income tax consequences of these transactions including the ACB of the shares owned at December 31, 2021?
Case C: On July 1, 2021, Lorty Inc. sells equipment for $ 126,000. The capital cost of the equipment is $111,000 and the carrying value for accounting purposes is $ 93,000. For equipment was included in Class 8. The UCC balance in the class on January 1, 2021, was $ 103,000. There were no other additions or dispositions to the class during the taxation year ending December 31, 2021. Indicate the reconciliation adjustments that would be required for Lorty Inc.'s accounting income for 2021.
Case D: When business properties are destroyed in a natural disaster (e.g., flood, tornado, earthquake, etc.) there may be adverse income tax consequences. Briefly describe the income tax consequences of receiving proceeds of an insurance policy to compensate for the involuntary loss of property in the absence of special elective rules.
Case E: During the current year, Robert Langois disposed of several items. The POD and the ACB of the various items are as follows: