Joanne owns a rental property, which she purchased for $150,000 in 20X0 (land $50,000 and building $100,000). In the same year, her rental income before CCA was
$8,000. In 20X1 the rental income before CCA was $3000. Joanne has chosen to expense the CCA on her rental property. Which of the following statements is true? (The rental property is a Class 1, 4% asset.)

Question

Quizplus · Accepted Answer

Joanne can claim CCA on the building portion of the property. In 20X1, the CCA would be 4% of the undepreciated capital cost of the building ($100,000), which is $4,000. Her rental income before CCA was $3,000, so after claiming CCA, her rental income becomes $0.

Joanne Owns a Rental Property, Which She Purchased for $150,000