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  3. during its taxation year ending december 31, 2021,

During its taxation year ending December 31, 2021, all of the shares of R2 Ltd....

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Accounting

During its taxation year ending December 31, 2021, all of the shares of R2 Ltd. are acquired by an unrelated person. The acquisition occurs on May 1, 2021 and, at that time, Vick has available a 2017 net capital loss balance of $360,000. Also at that time the company has the following capital properties: Capital Property Capital Cost UCC FMV Non-Depreciable $8,00,000 N/A $15,00,000 Depreciable 5,00,000 $3,50,000 6,30,000 For the period January 1, 2021 through April 30, 2021, the company has the following capital properties:

Capital Property Capital Cost UCC FMV

Non-Depreciable $8,00,000 N/A $15,00,000

Depreciable 5,00,000 $3,50,000 6,30,000

For the period January 1, 2021 through April 30, 2021, the company has a business loss of $150,000. Required: 1. Assume that the company will elect the FMV as the elected amount for the property. What are the tax implications for each type of capital property? 2. If the company decides to only elect what is necessary to eliminate any losses that will expire, indicate which properties the elections should be made on and at what value.

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