Quantro Enterprises Ltd. and Baizley Holdings Ltd. (BHL) are both 100% owned by Harold Baizley. Both companies are Canadian- controlled private corporations. Quantro operates a wholesale business and pays rent to BHL for the use of a warehouse property. BHL owns only one asset-the warehouse building and related land that is rented by Quantro for $36,000 per year. The property was originally owned by Quantro but was sold to BHL several years ago as a means to reduce the risk exposure of this appreciating asset. On December 31, 2023 (the year-end of both companies), BHL sold the warehouse property to a third party for $370,000 (land $40,000, building $330,000). The property originally cost $320,000 (land $25,000, building $295,000). The undepreciated capital cost of the building at December 31, 2022, was $254,000. One month before selling the warehouse property, BHL purchased a newly constructed warehouse property for $480,000. (land $50,000, building $430,000.). Required: Determine BHL's net income for tax purposes for 2023. Rent CCA on new warehouse he Recapture of CCA Property Income Land Taxable capital gains Building: Taxable capital gains Taxable Capital Gains $ 0 Net Income for Tax purposes $ 0
Quantro Enterprises Ltd. and Baizley Holdings Ltd. (BHL) are both 100% owned by Harold Baizley. Both companies are Canadian- controlled private corporations. Quantro operates a wholesale business and pays rent to BHL for the use of a warehouse property. BHL owns only one asset-the warehouse building and related land that is rented by Quantro for $36,000 per year. The property was originally owned by Quantro but was sold to BHL several years ago as a means to reduce the risk exposure of this appreciating asset. On December 31, 2023 (the year-end of both companies), BHL sold the warehouse property to a third party for $370,000 (land $40,000, building $330,000). The property originally cost $320,000 (land $25,000, building $295,000). The undepreciated capital cost of the building at December 31, 2022, was $254,000. One month before selling the warehouse property, BHL purchased a newly constructed warehouse property for $480,000. (land $50,000, building $430,000.). Required: Determine BHL's net income for tax purposes for 2023. Rent CCA on new warehouse he Recapture of CCA Property Income Land Taxable capital gains Building: Taxable capital gains Taxable Capital Gains $ 0 Net Income for Tax purposes $ 0
Chapter15: Choice Of Business Entity—other Considerations
Section: Chapter Questions
Problem 79P
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Recommended textbooks for you