Question

Taxation rules of Alberta Canada.

ACTIVITY 4: Recapture Example Two assets in class 8 (20%) with an original cost of $50,000 each. Opening UCC for the class is $36,864. (a) Sell One Asset For $40,000. What is the tax consequence of this sale? (b) Sell One Asset For $60,000. What are the tax consequences of this sale? 1/2 Year Rule Subject to CCA Class No. UCC Additions Disposals Balance Rate % CCA UCC

Answer 1

class no	UCC	Additions	Disposals	Balance	1/2Year Rule	Sublect to CCA	Rate%	CCA	UCC
8	$36864	-	$40000	($3136)	0	0	0	0	0
8	$36864	-	$60000	($23136)	0	0	0	0	0

As the amount in column 5 is negative ,add it to income as a recapture on line 8230,as other income,in Part 3 on Page1

a) $3136 would be treated as other income ,

b) $23136 would be treated as other income