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Lecture 3 Solution to Ex 6-6

Lecture 3 Solution to Ex 6-6 - 178,000 ½ year rule(½ of...

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Exercise 6-6 (pg 216) Total cost of property: 185,000 Allocate to land: (42,000) Cost of building: 143,000 Add: improvements: 35,000 Total cost: 178,000 For 2009: Rental income: 7,200 Rental expenses (excl. CCA) (5,100) N.I. before CCA 2,100 Calculate CCA: UCC Class 1 Opening balance 0 Add: purchases: 178,000 Deduct: dispositions 0 178,000 UCC before adjustment:
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Unformatted text preview: 178,000 ½ year rule (½ of net additions) (89,000) UCC before CCA (CCA base) 89,000 Deduct CCA (4%) – 89K x 4% = (3,560) However CCA is limited to net rental income!! (2,100) Addback ½ net additions 89,000 Ending UCC Dec 31, 2009 175,900 For 2009: NI before CCA 2,100 CCA (2,100) Net rental income: Nil...
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