RSM324H1 Chapter Notes - Chapter 8: Mutual Fund, Debenture
15 Feb 2017
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Chapter 8 gains and losses on the disposition of capital property capital gains. Capital gains (losses) refer to the gain (loss) realized on the disposal of capital property. Capital property is property that provides a long-term and enduring benefit to its owners; consequently, disposals of such property tend to occur irregularly and infrequently over a ta(cid:454)pa(cid:455)er"s lifeti(cid:373)e. A capital gain (loss) is the gain (loss) realized on the disposition of capital property. For a property to be classified as capital property, it must have been acquired and used for the purpose of providing the owner with a long-term or enduring benefit: benefit refers to both direct and indirect benefits. Capital vs. business income: property acquired for the purpose of resale at a profit is classified as inventory. Its disposition results in business income or a business loss: property acquired for the purpose of providing the owner with a long-term or enduring benefit is classified as capital property.
