MGAC01H3 Lecture Notes - Capital Cost, Neume, Capital Gain
8 Jul 2014
School
Department
Course
Professor
Document Summary
Pidgeon dock ltd. has sold the building for less than its cost amount, with a concurrent capital gain on the land. When this occurs, subsection 13(21. 1) reallocates the proceeds of disposition between the land and the building. Any loss on the building is reduced by the amount of the gain on the land. Deemed proceeds of the building is equal to the lesser of: (a) total fmv of land and building. Fmv of land: cost of land amount (a) (b) the greater of: i) ii) Fmv of building the lesser of: ucc of building, capital cost amount (b) Deemed proceeds building (lesser of (a) and (b)) No terminal loss arises from the disposition of the building as the deemed proceeds are equal to ucc. The lesser of the capital cost or proceeds on disposition are credited to the ucc pool. In this situation, pd credits the deemed proceeds, which was determined to be the ucc of the building.
