Mr. Slumlord owns and operates rental properties. The information relating to these properties for the year ended December 31, 2020 is as follows: Building A

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Mr. Slumlord owns and operates rental properties. The information relating to these properties for the year ended December 31, 2020 is as follows:

                                    Building                      A Building        B Building         C Appliances

                                     Class 1: 4%                 Class 3: 5%       Class 3: 5%   Class 8: 20%

Capital Cost                $140,000                     $495,000         $125,000          $ 15,000  

UCC @ Dec. 31, 2019 $120,000                   $490,000          $115,000             $ 3,000

Proceeds of Sale               N/A                    * see note               N/A           * see note

Rent revenues            $ 12,000                  $ 40,000          $ 10,000

Disbursements:

Property taxes             $ 2,800                   $ 9,900             $ 2,500

Insurance                        820                        2,600                  780

Repairs                          3,300                      8,500                2,200

Mortgage interest      1,700                       3,400                1,500

Mortgage principal        6,700                   8,425                3,375

Superintendent

Salaries                                                   20,000

Legal fees on sale of property               4,000

Cost of addition to

Building A                    2 5,000

On November 15, 2020, Building B, the land on which it sits and the appliances contained within the building were sold for total proceeds of $637,500. The selling expenses are noted above in the list of disbursements. The proceeds of sale and the related selling expenses were not separately allocated to Land, Building and Appliances, according to the information provided in the legal sale document. However, a competent appraiser assessed the property and provided the following values:

Land (original cost was $135,000) $130,000

Building                                                   520,000

Appliances                                         -0-

The appliances sold with Building B were the only assets contained in Class 8 – in other words, there were no Class 8 assets remaining as at December 31, 2020.  

Required

a) Using proper format, prepare a Statement of Rental Income for the year ended December 31, 2020, to be filed by Mr. Slumlord with his 2020 personal income tax return.

b) Calculate any taxable capital gain or allowable capital loss with respect to the sale of the rental property, which Mr. Slumlord will have to report on his 2020 personal income tax return. (Remember that with the sale of real estate, you can not “lump” everything into one calculation!)

c) Complete the CCA schedule to accompany the statement of rental income from part (a).