Saul has two residential rental properties that are mortgaged. Both properties are in Class 1 with a Capital Cost Allowance rate of 4 percent. At the beginning of the year, Property A has a Undepreciated Capital Cost of

$500,000

and Property B has a Undepreciated Capital Cost of

$1,100,000.

Before consideration of Capital Cost Allowance, Property A earned net rental income of

$16,000,

and Property B had a net rental loss of

$27,000.

What is the maximum amount of Capital Cost Allowance Saul will be able to claim this year?

A.

$16,000

B.

Nil.

C.

$16,000

D.44000