13.4.1 - 2005 the tax deprecation on this property is...

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BILL THE LANDLORD INCOME TAX PROBLEM #3 Bill the Landlord has a sales job which generates $85,000 during 2005. He incurred $15,000 of tax deductible related to his job. Bill also has a substantial portfolio that generated $20,000 in capital gains which are 50% taxable as well as $5,000 of interest income. Bill uses margin and incurred $2,000 of related interest expenses. During 2005 Bill paid $1,000 of professional fees and made a $16,500 RRSP contribution (deduct against 2005 income). Bill’s employer withheld $22,652.25 of income taxes during 2005. On January 1, 2004 Bill purchased an apartment building for $500,000. For the tax year
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Unformatted text preview: 2005, the tax deprecation on this property is $20,000. The building generated $45,000 of rent during 2005. The property is financed by a $500,000 mortgage with a 25 year amortization period and a fixed mortgage rate of 6%. The mortgage was first taken out on January 1, 2005, (assume that Bill only makes one mortgage payment at the end of each year). The property incurred $8,000 of maintenance and repair expenses during 2005. REQUIRED : Calculate in the following order 1. The amount of interest paid on the mortgage during 2005. 2. The net rental income during 2005. 3. Taxes Owing (refund)...
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