Fung Wo purchased vacant land on a remote island off the coast of British Columb
ID: 2399002 • Letter: F
Question
Fung Wo purchased vacant land on a remote island off the coast of British Columbia on January 1, 20X2 for $50,000. She intended to re-sell it for a profit the next year but due to an oil spill, property values dropped. She was finally able to sell the vacant land for $45,000 on December 31, 20X5. In the meantime, she paid property taxes of $500 each year. For 20X5 tax purposes, Fung Wo has:
An allowable capital loss of $2,500
An allowable capital loss of $3,500
A net business loss of $5,000
A net business loss of $7,000
A.An allowable capital loss of $2,500
B.An allowable capital loss of $3,500
C.A net business loss of $5,000
D.A net business loss of $7,000
Explanation / Answer
Ans) Option C is the answer i.e. A net business loss of $5,000,
Note: Property Tax Paid $500 each year from Year 2002 to year 2005 was a separate expense for the respective Financial Year.
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