RSM324H1 Chapter Notes - Chapter 8: Property Income, Debenture, Mutual Fund
31 Dec 2017
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Chapter 8 gains and losses on the dispostion of capital property capital gains: capital gain and capital loss defined. Capital property: acquired and used for the purpose of providing the owner with a long-term or enduring benefit. Intended purpose of acquisition was to achieve benefits over a long period of time. Benefit refers to both direct and indirect benefits and no be financial in nature: capital versus business income. Whether classified as a business activity or as a capital transaction intended purpose: property acquired for the purpose of resale at a profit is classified as inventory. Its disposition results in business income or a business loss: property acquired for the purpose of providing the owner with a long-term or enduring benefit is classified as capital property. Its disposition results in a capital gain or loss. Hold for a long period of time proves the claim that it is capital property which was purchased to provide a long-term and enduring benefit.
