Calculate the maximum CCA deduction allowed

Reference no: EM132773990

Question - You work for a corporation that has existed for several years; in prior years the business has invested in assets that have been grouped into the following CCA classes:

- Class 8, with an opening UCC balance of $200,000.00 for the current year;

- Class 50 with an opening UCC balance of nil;

During the current year an asset within the furniture and fixture class (that was added in a prior year) was sold. It was initially purchased for $20,000 was sold for proceeds of $15,000. Moreover, new couches were purchased for $44,000; they were available for use.

In addition, the company bought their first piece of real-estate for $1,000,000, of which $700,000 was allocated to land.The building was grouped in Class 1.

Part 1: Calculate the maximum CCA deduction allowed, ending UCC balance(s), and confirm whether or not there is a capital gain or capital loss.

Part 2: Explain what impact the accelerated investment incentive adjustment has on the timing of CCA deductions. In addition, explain whether or not it has any impact on the total amount of CCA claimed over the life of an asset.

Reference no: EM132773990

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