Reference no: EM132993459

Mr. Andrew Adams purchased a triplex on February 07, 2019 for a total cost of $980,000. Of this amount, it is estimated that $280,000 should be allocated to the land on which the building was located. The three rental units in the triplex are identical in size and features and, for purposes of allocation to a CCA class, the property is considered to be a single unit.

• On February 13, 2019, Mr. Andrew Adams purchased furniture and appliances for one of the units at a total cost of $24,000.
• Early in March, 2019, all three units were rented. For 2019, Mr. Andrew Adams' triplex generated rents of $80,000 and incurred expenses, other than CCA, of $22,000.
• In August, 2020, the tenants in the furnished unit moved out and purchased all the furniture and appliances from Mr. Andrew Adams for $12,000. For 2020, Mr. Andrew Adams' triplex generated rents of $40,000 and incurred expenses, other than CCA, of $24,000.
• Mr. Andrew Adams claimed the maximum CCA allowable in both years.

Required:

Problem 1: Calculate the Net Rental Income 2019 and 2020. Also, determine the UCC balances on January 1, 2021. Include in your solution any tax consequences associated with the sale of the furniture and appliances.