Reference no: EM131941866

Question - On December 1, 2016 Morteaux Ltd. sells its only building in anticipation of moving to a new location in 2017. Morteaux Ltd. has a taxation year that ends on December 31st. The property is sold for #2300,000 and at the time of th sale the land had adjusted cost base equal to its fair market value of #1,200,000 while the building had a capital cost equal to its fair market value of $1,100,000 and a UCC of $250000. During February 2017 the store building is replaced at a total cost of #2,700,000 with $1,300,000 allocated to the land and $1,400,000 allocated to the building. The replacement building is a 25 year old building. Assume the appropriate election is made to minimize total taxes for the years 2016 and 2017. Calculate the effect on 2016 Net Income for Tax Purpose of the sale and acquisition and the maximum CCA that can be taken on the new building in 2017.