Tax write off for the spouse

[spark1]

Hi all,

My wife and I are jointly (50/50) owing an investment property (a duplex). She does booking, accounting, and helping with property management and painting/cleaning when tenants moved out. She is in much lower tax bracket then I.


1. Can we write off her labour costs from the property and add to her line 130 "other income"?
2. I estimated her overall labor worth about 250$ /month. Will it trigger attention of the big brother? What amount would be reasonable from the point of CRA?

thank you.
Spark

 

[Thomas Beyer]

You can expense ANY actual and reasonable expense, regardless who does it.

Is $250/month for those tasks reasonable ? Maybe .. depends on # of units .. perhaps a bit steep for one unit .. but OK for your duplex ..

another option is to use an annual figure and state

X $s for filling a vacancy
Y $s for book keeping
Z $s for XXX hours of cleaning

as some months are real busy and some are slow ..

CRA has the right to question it .. and may or may not !

 

[spark1]

Thank you very much Thomas,
I always appreciate your comments and answers.
spark

QUOTE (ThomasBeyer @ Apr 19 2010, 06:06 PM) You can expense ANY actual and reasonable expense, regardless who does it.

Is $250/month for those tasks reasonable ? Maybe .. depends on # of units .. perhaps a bit steep for one unit .. but OK for your duplex ..

another option is to use an annual figure and state

X $s for filling a vacancy
Y $s for book keeping
Z $s for XXX hours of cleaning

as some months are real busy and some are slow ..

CRA has the right to question it .. and may or may not !

 

[fumbrunner]

QUOTE (spark1 @ Apr 19 2010, 03:02 PM) Hi all,

My wife and I are jointly (50/50) owing an investment property (a duplex). She does booking, accounting, and helping with property management and painting/cleaning when tenants moved out. She is in much lower tax bracket then I.


1. Can we write off her labour costs from the property and add to her line 130 "other income"?
2. I estimated her overall labor worth about 250$ /month. Will it trigger attention of the big brother? What amount would be reasonable from the point of CRA?

thank you.
Spark

You should also evaluate if the benefit of claiming this cost outweighs the cost of her claiming additional income. There are other ways to decrease your taxable income from rentals, such as claiming CCA.

 

[spark1]

Thank you Furnbrunner,

it seems it is worth at this point to add to her (lower) income versus CCA. Once the duplex starts to cashflow fullsteam then I will consider CCA.



QUOTE (fumbrunner @ Apr 21 2010, 08:11 AM) You should also evaluate if the benefit of claiming this cost outweighs the cost of her claiming additional income. There are other ways to decrease your taxable income from rentals, such as claiming CCA.