On December 1, 2020, Mr. Jordon Jordu converts his summer cottage into a rental property. The cottage has an original cost of $57,000 and it will not be designated as his principal residence for any of the years owned. At the time of the conversion, the fair market value of the property is $136,400. It is estimated that the land value that is included in both the $57,000 cost and the $136,400 fair market value is $20,000. Determine the 2020 tax consequences of this change in use. Your answer should include the maximum CCA that would be available for 2020, and the January 1, 2021 UCC for the rental property, assuming the maximum 2020 CCA is deducted.

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The Answer of On December 1, 2020, Mr. Jordon Jordu converts his summer cottage into a rental property. The cottage has an original cost of $57,000 and it will not be designated as his principal residence for any of the years owned. At the time of the conversion, the fair market value of the property is $136,400. It is estimated that the land value that is included in both the $57,000 cost and the $136,400 fair market value is $20,000. Determine the 2020 tax consequences of this change in use. Your answer should include the maximum CCA that would be available for 2020, and the January 1, 2021 UCC for the rental property, assuming the maximum 2020 CCA is deducted.