Reference no: EM132985150

Question: Mrs. Ima Landlord owns and operates rental properties. The information relating to these properties for the year ended December 31, 2019 is as follows:

Building A Class 1; Building B Class 3; Build C Class 3; Building B Fixtures Class 8;
Capital cost $140,000 $500,000 $50,000 $10,000 
U.C.C. @ Dec. 31,
2018 $120,000 $400,000 $40,000 $3,000  
Rental revenues $17,000 $40,000 $5,000  

Disbursements:
Property taxes $3,500 $15,000 $1,800  
Repairs $5,000 $6,000 $1,700  
Insurance $1,000 $12,000 $500  
Superintendent
salaries $4,800 $8,000 -0- 
Mortgage interest $700 -0- -0-  
Mortgage principal$8,000 -0- -0-  
Legal fees on sale of Building B $4,000

Additional Information:

During 2019, an addition was made to Building A at a cost of $50,000.

During 2019, Building B and the fixtures referred to above were sold for total proceeds of $506,250. The property was originally purchased in 1987 at a cost of $560,000, which was allocated as follows:

Land $ 50,000
Building 500,000
Fixtures 10,000
$560,000

The property was appraised, just prior to the sale, and the following values were assigned:

Land $100,000
Building 400,000
Fixtures -0-
$500,000

CCA classes and rates:

Class 1 - 4%
Class 3 - 5%
Class 8 - 20%

Required:

(1) Prepare, in good format, an aggregate Statement of Rental Income for the year-ended December 31, 2019 and a Capital Cost Allowance schedule to be filed by Mrs. Landlord with her 2019 personal income tax return.

NOTE: GOOD FORMAT means that I want to see a proper statement heading and an itemized list of expenses. Provide detail by expense category, not by building.

(2) Calculate the taxable capital gain and/or allowable capital loss to be included in income by Mrs. Landlord, as a result of the sale of Building B.