Question
Gurpreet Sandhu received a $300,000 inheritance in 2020. With the proceeds, Gurpreet purchased the following investments: 1) Two rental properties: Property A has a value
Gurpreet Sandhu received a $300,000 inheritance in 2020. With the proceeds, Gurpreet purchased the following investments:
1) Two rental properties: Property A has a value of $85,000, of which $40,000 is allocated to the building. Property B has a value of $110,000, of which $60,000 is allocated to the building. The properties earned a total of $9,750 in rental income before CCA. Both buildings are Class 1 - 4% assets, and the maximum allowable CCA will be claimed each year. The capital growth of the two properties combined is expected to be 5%.
2) A 3-year bond purchased on July 1st: Valued at $50,000 with 10% annual interest paid at maturity 3) Portfolio shares: Worth $10,000 - Eligible dividends in the amount of $700 were paid to Gurpreet before the end of the year. The capital growth of the shares is expected to be 3%.
4) A cash dividend of $800 received form a foreign company (a 20% withholding tax was deducted by the foreign government on the principle amount of dividend). 5) He paid $7000 fee to a financial planner for the investment advice. The remainder of the money was applied to the mortgage.
Required:
Calculate Gurpreet's minimum property income for 2020.
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