Peter purchased a rental property in 2010 at a cost of $650,000 ($460,000 for the building and

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Question:

Peter purchased a rental property in 2010 at a cost of $650,000 ($460,000 for the building and $190,000 for the land). He had to pay the notary ($1,150), the inspection ($780) and the “Welcome Tax” ($7,100). The rental property was profitable for all years. As of January 1, 2020, the UCC of Class 1 was $427,330.

Peter sold the property in 2020. The selling price was $(870,000) (70% allocated to the building; 30% to the land). When selling the property, James had to pay for the evaluation ($350) and the commission to the real estate agent ($20,500).

Required:

a) Calculate the taxable capital gain on the sale of the property.

b) Calculate the recapture of CCA.