Question
Paul purchased a newly-constructed commercial rental property in 2010. The original cost of the building was $2,000,000, and the undepreciated capital cost (UCC) was $684,816
Paul purchased a newly-constructed commercial rental property in 2010. The original cost of the building was $2,000,000, and the undepreciated capital cost (UCC) was $684,816 on December 31, 2019. Paul incurred the following costs during 2020. What is the maximum capital cost allowance (CCA) Paul can claim on his personal income tax return for the rental property for 2020? Please show calculations.
| Gross rents received $230,000 |
|
| Expenses related to earning rental income: |
|
| Advertising (for tenants) | 5,000 |
| Property taxes | 60,000 |
| Utilities (paid by tenants) Interest on Mortgage of Building | Nil 85,000 |
| Maintenance | 45,000 |
(a) The maximum CCA on the building is $27,393.
(b) The maximum CCA on the building is $35,000.
(c) The maximum CCA on the building is $41,089.
(d) The maximum CCA on the building is $68,482.
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