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CCA Part II 2015

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Continuing the series on CCA, now covering dispositions, including terminal losses and recapture of depreciation Business Career College is a national financial services education provider. See our insurance, financial planning and continuing education courses, including self-paced and instructor led options, at https://www.businesscareercollege.com For great industry articles, follow on Twitter (https://twitter.com/JasonWattBCC) or like on Facebook (https://www.facebook.com/BusinessCareerCollege/).
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Text Comments (14)
Wilfrid Longard (1 month ago)
Your videos are clutch for law students studying tax. Thanks so much. Also, your voice sounds like Tom Cruise. Cheers!
BCC Education (1 month ago)
Nice! That's definitely a first. Thanks for watching.
Omar Tayyab (1 year ago)
In scenario 3, u say we get taxed 100% on the $2000 and 50% on the $1000. At what tax rate do we make an income of $2500??? This was not mentioned.... Secondly, I want to know in scenario 2, the terminal loss of $X, would it be recorded in the expenses column of the income statement for that year??? or next year??.. ( I'm an engineering student who is stuck taking this course, so kindly elaborate in as much detail as you can). Your response would be massively appreciated.
BCC Education (1 year ago)
Again, this question is confusing to me. Can you please tell me what the $3000, $2000, and $1000 represent in your example?
BCC Education (1 year ago)
Omar, what course are you taking? I don't understand what you mean when you say 'at what tax rate do we make an income of $2500?' Your tax rate is dependent on your income, not the other way around.
Omar Tayyab (1 year ago)
so i guess im asking if: net income made on sale= $3000 - ($2000*(tax rate)+$1000*(0.5*tax rate))=$2500, I know i can solve for it.... Just making sure... because i think i missed something but I cant tell what it is that i missed...
tee cee (1 year ago)
why i scenario 2 when its the last asset in the class, would a recapture decrease ucc? doesn't a recapture mean you depreciated too much so wouldn't you increase ucc ?
Jason Watt (1 year ago)
I think you're phrasing your question incorrectly. I believe you're referring to an asset sold for proceeds higher than the UCC. If it's the last asset in its class, then it's just a recapture - there is no UCC left, because there is nothing left to have a UCC. If it's not the last asset in the class, the UCC is reduced. Both of these have the same consequence - you undo the excess depreciation that was previously taken. Ask yourself this - is a higher UCC better, or a lower UCC?
Alan Leung (2 years ago)
further along, wouldn't scenario #2 (terminal loss) only result when the there are no more assets left in the CCA class? (i.e. sold the last asset off within that class) therefore, in this case (terminal loss), you actually wouldn't add that $400 back?
BCC Education (2 years ago)
If there's other property in the class, it has to have a UCC. I establish that at 7:38
Alan Leung (2 years ago)
thank you for pointing that out again, yes, it was mentioned that these first sets of scenarios were indeed the last asset being sold in its class. I think i got your 2nd scenario and #2 sold for $7,600 mixed up, therefore, I now understand the $400 of increase needed (add back) to the UCC pool, my apologies I am not sure however, where the UCC being mentioned at $40,000, was it mentioned in the video somewhere? both of these scenarios I thought were working with the UCC of $8,000
BCC Education (2 years ago)
I indicate at the 4:01 mark that all that first set of scenarios is in a situation in which the asset in question is the last in the class. I'm not sure what you mean by 'add that $400 back.' What would it be added back to?
Mina Ibrahim (2 years ago)
Why in the second scenario you increased the UCC for 600 instead of 400 ? Thanks
BCC Education (2 years ago)
+Mina Ibrahim Sorry - just bad math on my part. It should be $40,400.

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