Question 3 (24 marks) Myrtle Beech owns and operates rental properties. The information relating to these properties for the year ended December 31, 2021, is as follows: Building A Class 1,4% $ 140,000 115,000 Building B Class 3,5% $ 495,000 485,000 Building C Appliances Class 3, 5% Class 8, 20% $ 125,000 $ 15,000 120,000 4,500 Capital cost UCC @ Dec. 31, 2020 Proceeds of sale n/a *See below n/a *See below Rent revenues $ 15,000 $ 38,000 $ 10,000 Disbursements Property taxes Insurance Repairs Mortgage interest Mortgage principle Superintendent salaries $ 2,800 820 3,300 1,700 6,700 0 $ 9,900 2,600 8,500 3,400 8,425 19,500 $ 2.500 780 2,200 1,500 3,375 In the summer of 2021, Myrtle provided the details of an addition that was built on Building A, which was a much-needed expansion to the living space of this property. The cost of additions was $30,000. In 2021, the Ontario real estate market experienced an unprecedented demand for residential homes, and as a result, home prices in Ontario were being sold way above asking price. Myrtle was eager to take advantage of the skyrocketing real estate prices and decided this was an opportunity to unload one of her least profitable rental properties. She hired a competent appraiser to assess the property and they provided her the following values: Land (original cost was $135,000) Building Appliances $ 250,000 950,000 -0- On November 15, 2021, Building B, the land on which it sits, and the appliances contained within the building were sold for total proceeds of $1,200,000. The real estate fees on this sale were 4% of the total proceeds. 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. 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, 2021. (continued next page) Required: a) Using proper format, prepare a Statement of Rental Income with CCA schedule for the year ended December 31, 2021, to be filed by Myrtle Beech with her 2021 personal income tax return. b) Calculate any taxable capital gain or allowable capital loss with respect to the sale of the rental property, which Myrtle will have to report on her 2021 personal income tax return. (Remember that with the sale of real estate, you can not "lump" everything into one calculation!) Question 3 (24 marks) Myrtle Beech owns and operates rental properties. The information relating to these properties for the year ended December 31, 2021, is as follows: Building A Class 1,4% $ 140,000 115,000 Building B Class 3,5% $ 495,000 485,000 Building C Appliances Class 3, 5% Class 8, 20% $ 125,000 $ 15,000 120,000 4,500 Capital cost UCC @ Dec. 31, 2020 Proceeds of sale n/a *See below n/a *See below Rent revenues $ 15,000 $ 38,000 $ 10,000 Disbursements Property taxes Insurance Repairs Mortgage interest Mortgage principle Superintendent salaries $ 2,800 820 3,300 1,700 6,700 0 $ 9,900 2,600 8,500 3,400 8,425 19,500 $ 2.500 780 2,200 1,500 3,375 In the summer of 2021, Myrtle provided the details of an addition that was built on Building A, which was a much-needed expansion to the living space of this property. The cost of additions was $30,000. In 2021, the Ontario real estate market experienced an unprecedented demand for residential homes, and as a result, home prices in Ontario were being sold way above asking price. Myrtle was eager to take advantage of the skyrocketing real estate prices and decided this was an opportunity to unload one of her least profitable rental properties. She hired a competent appraiser to assess the property and they provided her the following values: Land (original cost was $135,000) Building Appliances $ 250,000 950,000 -0- On November 15, 2021, Building B, the land on which it sits, and the appliances contained within the building were sold for total proceeds of $1,200,000. The real estate fees on this sale were 4% of the total proceeds. 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. 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, 2021. (continued next page) Required: a) Using proper format, prepare a Statement of Rental Income with CCA schedule for the year ended December 31, 2021, to be filed by Myrtle Beech with her 2021 personal income tax return. b) Calculate any taxable capital gain or allowable capital loss with respect to the sale of the rental property, which Myrtle will have to report on her 2021 personal income tax return. (Remember that with the sale of real estate, you can not "lump" everything into one calculation!)