Evergreen Trees Inc

question 1

Essay

Evergreen Trees Inc. is a CCPC operating in your province. The company has a December 31st
year-end.
Three asset sales occurred prior to the end of 20x1. The following information pertains to the net gai sale of the assets:
Asset 1: Building (One of several owned by the company)
The building was previously purchased for $80,000. At the time of the sale in 20x1, the accumulated amortization on the building was $10,000. The UCC balance was $65,000. The full payment of $110 received before the end of the year.
Asset 2: Land
The land was purchased for $200,000 and sold in 20x1 for $250,000. Proceeds of $60,000 will be rec year. The remainder of the payment will be received in equal installments over the next eight years.
Asset 3: Marketable Securities
The company sold its entire public portfolio this year. The adjusted cost base of the shares was $100, market value of the shares at the time of sale in 20x1 was $135,000. Selling costs on the sale were $5
Required:
A)Calculate the minimum taxable capital gain that Evergreen Trees Inc. will have to report in 20x1.
B)Calculate the minimum taxable capital gain that must be reported in 20x2.

• A)Calculate the minimum taxable capital gain that Evergreen Trees Inc. will have to report in 20x1.
• B)Calculate the minimum taxable capital gain that must be reported in 20x2.

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Definitions:

Variable Annuity

An insurance product with an investment component, where payouts vary based on the performance of the selected investments.

Life Expectancy

The average period that a person may expect to live, based on demographic factors and health conditions.

Target-date

Target-date refers to a specific point in time set as a goal or deadline for the achievement of an objective, commonly used in the context of retirement planning investments.

Retirement Funds

Investment pools specifically designed to generate income and secure financial stability for individuals in their retirement years.