Corporation A sold a building having a cost of $3,800,000 to an associated corporation (Corporation B) for its FMV of $4,200,000, so that s. 13(7)(e) reduced its cost to Corporation B to $4,000,000. Corporation B then resold the immovable for $4,150,000 to arm’s length purchasers, and incurred disposition expenses of $40,000. Is the $200,000 difference between the price paid of $4,200,000 and the cost of $4,000,000 included in any depreciable class?
CRA responded that the $4,000,000 was required to be added by Corporation B to the prescribed class and the $200,000 difference was not to be included in any prescribed class.