Incorrect CCA calculation on rental propery

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I have 2 rental properties, and both have net income before CCA. I am using form T776.

The CCA calculation is only one property creating a net loss on one property which offsets the net income on the other property. In this case, no rental incomes are shown on the final tax return.

However, the calculations are incorrect because you cannot create a loss with CCA.

[apetrosk]

I believe the rule is that you cannot create a loss for your entire "rental income portfolio".  You CAN create a net loss on one property that offsets another net gain on another property to bring your income across all rentals to zero.  Your income across all rentals is what cannot be below zero (a loss). 

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I can understand the overall net income is zero for the rental properties. However, CCA is calculated on one property and not on the other property. Is it allowable under the CRA rule?

[TurboTaxGinette]

Please see this Canada Revenue Agency (CRA) link for more information: Capital cost allowance (CCA) for rental property. If further clarification is required please call the CRA at 1-800-959-8281.

Thank you for choosing TurboTax.

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Form T776 of Turbo Tax calculated CCA on one property but not on the other, thus creating a net loss for one property and offset the net income on the other property. The overall net income on the two properties are zero, and appears to be OK.

According to CRA rules, you can have a net loss on one property and net income on the other. However, you cannot create a net loss with CCA. Therefore, there is a bug with T776.

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Both properties have net income. The CCA calculation creates a net loss on one property and offset the net income on the other property, thus the overall net income is zero.

Let me give you a simple example. Let say property 1 and 2 both has a $1 net income. The CCA calculation has $2 on property 1and creates a net loss of -$1 and offset the net income of $1 on property 2. There is no CCA calculation on property 2. The overall net income on property 1 and 2 is zero.

My understanding is you cannot create a net loss with CCA. Please check if there is a bug on T776.

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Again, there should be separate CCA calculation on each individual properties, in this example, $1 on property 1 and 2 to offset the net income of $1 on both properties.

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I played around and discovered a workaround. 

You have to use "CTRL" "F2" to override the CCA calculation, enter "0" value, and manually re-enter the CCA on property 1. By doing this, it forced CCA calculation on property 2.

Now, you have CCA calculations on property 1 and 2, and the net income of the individual property and the total net income of the 2 properties are zero.