Reference no: EM133327656
Case 1
A piece of land is purchased for CAD 1,000,000 at the beginning of a project and is sold 10 years later at the end of the project for CAD 4,000,000. The tax rate is 35% and the capital gain inclusion rate is 50%. Inflation is negligible.
What if the land is sold for CAD 500,000?
Case 2
A building is purchased for CAD 500,000 at the beginning of a project and is sold four years later at the end of the project for CAD 600,000. The asset is in a pool with a CCA rate of 10%. The half-year rule applies. The tax rate is 35% and the capital gain inclusion rate is 50%. Inflation is negligible.
|
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
UCC
|
CAD 500,000
|
CAD 475,000
|
CAD 427,500
|
CAD 384,750
|
CAD 346,275
|
CCA
|
CAD 25,000
|
CAD 47,500
|
CAD 42,750
|
CAD 38,475
|
|
What if the building is sold for CAD 100,000?
Case 3
A piece of equipment is purchased for CAD 500,000 at the beginning of a project and is sold five years later at the end of the project for CAD 50,000. The asset is in a pool with a CCA rate of 30%. The half-year rule applies. The equipment is one of many assets in the pool. The RRR is 10.0%. The tax rate is 35% and the capital gain inclusion rate is 50%. Inflation is negligible.
|
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Year 6
|
UCC
|
CAD 500,000
|
CAD 425,000
|
CAD 297,500
|
CAD 208,250
|
CAD 145,775
|
CAD 102,042
|
CCA
|
CAD 75,000
|
CAD 127,500
|
CAD 89,250
|
CAD 62,475
|
CAD 43,733
|
|
What if the equipment is sold for CAD 120,000?
What if the equipment is sold for CAD 600,000?