Problem
At the end of 2022, Fred Hicks owned two residential rental properties. Rental property 1 cost 125,000(land - 50 000;building - 75000) and at the close of 2020 had a UCC of 64000. Retal property 2 was acquired in 2022 for 210000 (land -80000; building - 130000). Revenue and expenses for the rental properties during the year were follows:
Property 1 Property 2 Total
Revenue 13200 4500 17700
expenses:
Mortgage interest (0) (3000) (3000)
Repairs & maintenance (5000) (0) (5000)
Property tax (3100) (1000) (4100)
Insurance (500) (200) (700)
(8600) (4200) (12800)
income 4900 1300 6200
Determine the maximum CCA deduction for the rental properties for 2022
For capital allowance purposes buildings 1 and 2 are pooled together because their cost is less than 50000. Building £3 and £4 fall into separate pools.