Question
In the current fiscal year, a corporation acquired a rental property from its sole shareholder. The building was transferred at its fair market value of
In the current fiscal year, a corporation acquired a rental property from its sole shareholder. The building was transferred at its fair market value of $125,000, but was not allocated to a separate Class 1. The shareholder originally paid $150,000 for it. The property was included in Class 1 (4%) on the shareholder's tax return. The shareholder has earned rental income on the property since its acquisition. The undepreciated capital cost of the building at the time of the transfer was $120,000. Which one of the following amounts represents the maximum allowable capital cost allowance that the corporation may claim for this building in the current fiscal year?
Select one:
A.
$5,000.
B.
$2,500.
C.
$2,400.
D.
$4,800.
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