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Problem 6 Sara Shimizu is the owner of two rental properties, 509 Brunswick Avenue and...

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Problem 6 Sara Shimizu is the owner of two rental properties, 509 Brunswick Avenue and 356 Spadina Road. These 509 Brunswick Avenue was sold for $550,000. A reasonable allocation of this amount is considered to be 75% to the building and 25% to the land. The following income and expenses were incurred in renting out the two properties in 2016: properties were purchased six years ago for $525,000 and $600,000, respectively. In 2015, Rental Interest on mortgage Operating costs.. . Promotion costs for sale of property Net income .. (40,000) (15,000) (5,000) 0 Introduction to Federal Income Taxatio 154 There are no meal or entertainment expenses included in the $5,000 of sales promotion costs. At December 31, 2015, the undepreciated capital cost of 509 Brunswick Avenue was $383,500 and that of 356 Spadina Road was $400,000. Sara has asked you to determine her income from the prope least amount possible for tax purposes in 2016. rty, assuming she wishes to report the

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