Jim Smith Owns Two Rental Properties Which He Purchased in 20x0.Property

Jim Smith owns two rental properties which he purchased in 20x0.Property A cost $100,000 (land $60,000 and building $40,000) and property B cost $120,000 (land $75,000 and building $45,000) .After all allowable expenses other than CCA,Jim's total rental income for the past two years was $1,000 in 20x0 and $10,000 in 20x1.Jim has chosen to deduct the maximum CCA allowed for both years.What is the UCC for his rental properties at the end of 20x1? (The properties are both Class 1 assets,amortized at 4%.)

A) $3,360
B) $79,968
C) $80,640
D) $206,976

Correct Answer:

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