Describe three different types of capital asset dispositions. In each case, indicate how the proceeds of disposition would be determined.

Question

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The Answer is Possible answers here would include:
• Sale of the capital asset. The proceeds of disposition here would be the sales price.
• Expropriation by a government body. The proceeds of disposition here would be the amount of compensation paid by the government body.
• Destruction through fire, flood, or other natural disasters. The proceeds of disposition here would be any insurance payments received.
• Loss through theft. The proceeds of disposition here may be nil. However, if there is insurance coverage, any amount paid by the insurer would be the proceeds of disposition.
• Deemed dispositions. The deemed proceeds of disposition here would be the amount specified in the Income Tax Act.

Describe Three Different Types of Capital Asset Dispositions