Hi; I am preparing for my test and am having trouble with rental property questions like these. I am looking to find out the net income for 2020 from the rental properties as well as the CCA affect that would be included in 2020 in regard to the personal income tax for two properties Charlie owns.

Thanks!

Charlie owns two rental properties. He had a net rental loss of $9,000 in 2019. The 2019 value is prior to claiming any CCA. In 2020, the properties had the following financial information: 1 2 Rent Received 18,000 2,500 Expenses: Advertising 2000 Utilities 4,200 4,000 Property tax 3,600 2,000 Rental #1 was purchased in 2003 at a cost of $90,000 for both the land and building. The cost of the land was $25,000 of this total purchase price. Property #2 was purchased in 2001 at a total cost of $155,000; the fair market value of the land at the time was $25,000. The UCC balance in Class 1 for property #1 was $33,150 and Class 1 for property #2 was $90,300 at January 1, 2020. During 2020, the local community enacted strict new bylaws on the safety requirements of rental| properties. To upgrade the two buildings to the new code would require $40,000 for property #1 and $60,000 for property #2. Charlie decided to improve #1 and paid $40,000 during July 2020. He decided to sell property #2 for $158,000, effective May 5, 2020. The fair market value of the land was appraised to be $38,000 and the building $120,000. Charlie used the proceeds, net of the $40,000 needed for property #1, to purchase a new condo complex on ABC Street. Total cost of the new property was $700,000, of which $140,000 related to the cost of the land. This property sale closed on August 1, 2020. Interest on the mortgage is $6,062 for the last five months of the year. He was able to rent the building's units to students beginning in September with cash flows as follows (September 1 - December 31): Gross rents received for period $ 5,500 Expenses related to earning rental income for the period: Advertising (for tenants) 500 Property taxes 3,400 Charlie owns two rental properties. He had a net rental loss of $9,000 in 2019. The 2019 value is prior to claiming any CCA. In 2020, the properties had the following financial information: 1 2 Rent Received 18,000 2,500 Expenses: Advertising 2000 Utilities 4,200 4,000 Property tax 3,600 2,000 Rental #1 was purchased in 2003 at a cost of $90,000 for both the land and building. The cost of the land was $25,000 of this total purchase price. Property #2 was purchased in 2001 at a total cost of $155,000; the fair market value of the land at the time was $25,000. The UCC balance in Class 1 for property #1 was $33,150 and Class 1 for property #2 was $90,300 at January 1, 2020. During 2020, the local community enacted strict new bylaws on the safety requirements of rental| properties. To upgrade the two buildings to the new code would require $40,000 for property #1 and $60,000 for property #2. Charlie decided to improve #1 and paid $40,000 during July 2020. He decided to sell property #2 for $158,000, effective May 5, 2020. The fair market value of the land was appraised to be $38,000 and the building $120,000. Charlie used the proceeds, net of the $40,000 needed for property #1, to purchase a new condo complex on ABC Street. Total cost of the new property was $700,000, of which $140,000 related to the cost of the land. This property sale closed on August 1, 2020. Interest on the mortgage is $6,062 for the last five months of the year. He was able to rent the building's units to students beginning in September with cash flows as follows (September 1 - December 31): Gross rents received for period $ 5,500 Expenses related to earning rental income for the period: Advertising (for tenants) 500 Property taxes 3,400