Saul has two residential rental properties that are mortgaged. Both properties are in Class 1 with a CCA rate of 4 percent. At the beginning of the year, Property A has a UCC of $500,000 and Property B has a UCC of $1,100,000. Before consideration of CCA, Property A earned net rental income of $43,000, and Property B had a net rental loss of $27,000. What is the maximum amount of CCA Saul will be able to claim this year?

Question

Quizplus · Accepted Answer

The maximum amount of CCA Saul can claim is limited to the net income from the properties before CCA. Since Property A earned $43,000 and Property B had a loss of $27,000, the net income before CCA is $16,000 ($43,000 - $27,000). Therefore, the maximum CCA claim cannot exceed this amount, making $16,000 the correct answer.

Saul Has Two Residential Rental Properties That Are Mortgaged