Midori Sato Owns a Rental Property Which Had a UCC

question 4

Multiple Choice

Midori Sato owns a rental property which had a UCC of $85,000 at the beginning of 2019.After all allowable expenses other than CCA, Midori's total rental income was $1,000 in 2019 and $10,000 in 2020.Midori always deducts the maximum CCA allowed.What is the UCC for the rental property at the end of 2020? (The property is a Class 1 building amortized at 4%.)

• A)$78,336
• B)$80,640
• C)$84,000
• D)$85,000

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Definitions:

Possession

The act or state of owning, controlling, or having an item or property in one's physical custody.

Exclusive Use

A clause in a lease or agreement granting one party the sole right to use a property, asset, or service in a specified way.

Rent Escalation Clause

In a lease, a clause that permits the landlord to increase the rent in association with increases in costs of living, property taxes, or the tenant’s commercial business.

Long-Term Leases

Lease agreements that extend for a long period, often exceeding a year, typically used for real estate and heavy equipment.