Rental loss and Tax

[23994]

Hi,

While I am preparing 2015 tax, I have a question regarding rental loss...

For example, I have rental loss $2000 in 2014, if I have rental income $1500 prior to CCA, can I deduct the rental loss $2000 of 2014 first then I do not need apply CCA because CCA will need to pay back when it is sold in future if there are appreciation...

But I am using Ufile 2015, what I have seen is although it carries on my 2014 rental loss $2000, it does not allow me to deduct it in 2015, instead, it applies the CCA first, and I played around and found out, if I do not have CCA,it will treat $1500 as my income of 2015...

My questions are:

1. how can I get the rental loss deducted? will it be able to deduct the following years rental income or not?
2. could rental loss deduct my current year income or not? my guess is Not, but still want to hear the confirmation...or
3. the rental loss will be able to deduct when I sell the rental property for any appreciation?

Please share your experience and tips, appreciated!

Sue

 

[Thomas Beyer]

You can use CCA to get your taxable rental income to 0, but not below it. CCA essentially is tax deferral until you sell.

If you have a true rental loss, before CCA, then you can co-mingle that loss with your other (employment) income for that year.

Only capital losses can be carried forward, say if you sold stocks or other investments at a loss. You can then co-mingle that capital loss with a capital gain in later years.

 

[23994]

Thanks Thomas...in my case and as I learned for the most cases of the first year, we will have real rental loss...so I should be able to deduct it in the same year with my income tax...I missed it last year, maybe I can ask CRA to re-open it for me this year?

 

[Thomas Beyer]

Yes you can refile a previous year

 

[RE123RE]

Hi,
As mentioned you can benefit from a rental loss by adding it to (reducing) your employment income.
Regarding your other question, FYI if you had the property under a corporation instead of your personal name, you would be able to carry losses over to following years. If I understand correctly, you can not do that in your case where you file it under your personal tax. However, the benefit including it in your personal tax, is of course a loss reduces your taxable income allowing you to pay Mr. Trudeau less money, where having it under a corporation does not.
Thanks

 

[23994]

Thanks, it does clarify my question and indeed I am filing under my personal and I will use it to offset my employment income