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mc_s_10 - e The ½ year rule does not apply to assets...

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MULTIPLE CHOICE QUESTIONS SOLUTIONS Q10. The correct answer is (a) $8,500. Since Robin Ltd. acquired the office building from a related person, Adam Ltd., the capital cost is limited to the capital cost before the transfer — $200,000 — plus the taxable capital gain recognized on the transfer — $12,500 [par. 13(7)(
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Unformatted text preview: e )]. The ½ year rule does not apply to assets acquired from a related person [reg. 1100(2.2)]. Thus, the CCA is calculated as follows: $212,500 x 4% = $8,500 Note that since the building was “used” when acquired, it is not eligible for the separate Class 1 CCA rate of 6% for non-residential buildings....
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