Question

Ranjit owns a residential rental building which he purchased for $300,000 in 2017. In that year, his rental income before CCA was $6,000. In 2018, his rental income before CCA was $12,000. Ranjit always minimizes his tax liability. Which of the following statements is correct?

a)

Ranjit has net rental income of nil in 2018.

b)

Ranjit has a net rental loss of $2,000 in 2018.

c)

Ranjit has net rental income of $480 in 2018.

d)

Ranjit has net rental income of $240 in 2018.

Answer 1

RANJIT HAS NET RENTAL INCOME OF $240 in 2018 - OPTION D

Date. _LI year - of purchase 2017 = 2017 Cost of purchase a $3,00,000 2017 =) Rental income before CCA . $6000 • (it is assumed that entire cost of $3,00,000 was related to building as the bifurcation was not given 1 it one can claim 4% of CCA on i residential building & only sol of the CCA can be claimed year of purchase, & 50% in . CCA in 2017 = $3,00,000x46x sol s'$ 6,000 1 year one Rental incomes & booo CCA = $6000

Date.—L L lear hoo 2018 - Rental income = $12,000 I CCA = 4% of (3,00.000 - 6000) @ CCA only on total cost less o claimed CCA) CCCA should be limited to max amount of rendal income. i.e one can't create dan loss means you have rental income of $ CD, too - CCA of -- $ 124000___ you can only claim $10.000 of CCA] CCA for 2018 = 45% of (2,94,000) all,760 Rental income = 12,000 Wet rental incomed - 12000~11760 E a $ 240 in 2018