AFM363 Lecture Notes - Lecture 16: Real Estate Broker, Wound Healing

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM363
• Professor: Dan Rogozynski

Document Summary

Capital vs inventory: capital property creates capital gains while inventory create business income. Badges of trade: factors that the courts use to assess the intentions (primary and secondary) behind purchasing an asset ( capital purposes or income purposes). Experience in real estate (knowledge indicates secondary intention of gaining on real estate development) Length of ownership is only one year. Financing costs indicate asset needs to be sold for repayment (no money in) Intended use was to earn rental income in relation to business. Nature of asset was a tree, the fruit was the rental income (developing for rental income) Plan approved by the city for setting up rental buildings. Work done on the asset was makes it easier to sell: city planning minimal. Tenants already paying rent financing make it more saleable. Forced to sell because of financial difficulty. Gaining on real estate development (real estate broker)