Susan Cousins purchased a house in Oshawa in March, 2017, for $250,000 (land; $80,000, building; $170,000). Even though Susan would be unable to reside in the house immediately, she felt it was a very good price and did not want to miss the opportunity to own this house. She rented out the house as of April, 2017. Her tenants will move out in December, 2018, and she will move into her house in January, 2019. The fair market value of the house at January 1, 2019 was $300,000 (land; $130,000, building;$170,000). The UCC of the house on this date is $163,000.

Which of the following is correct?

Select one:

a.

Susan can elect to designate the house as her principal residence for the years 2017 and 2018 so there is no capital gain on the house.

b.

Susan must recognize a capital gain for tax purposes of $50,000 at January 1, 2019.

c.

Susan must recognize a capital gain for tax purposes of $25,000 at January 1, 2018.

d.

The capital cost of the house for CCA purposes at January 1, 2019 is $275,000.