Tax deductible
- Thread starter garycote
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As a general rule, yes.
However, if you are improving the property then your expense may be a capital expense, and will need to be capitalized. Renovating a rental unit is an example of a capitalized expense. Repairing a hole in a wall would be a general expense.
If you have a specific question, you should talk to your accountant.
However, if you are improving the property then your expense may be a capital expense, and will need to be capitalized. Renovating a rental unit is an example of a capitalized expense. Repairing a hole in a wall would be a general expense.
If you have a specific question, you should talk to your accountant.
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You mean 100% same year?
....Current or operating expenses are recurring expenses that provide a short-term benefit. For example, a current expense is the cost of repairs you make to keep a rental property in the same condition as it was when you acquired it. You can deduct current expenses from your gross rental income in the year you incur them.
Capital expenses provide a benefit that usually lasts for several years. For example, costs to buy or improve your property are capital expenses. Generally, you cannot deduct the full amount of these expenses in the year you incur them. Instead, you can deduct their cost over a period of several years as capital cost allowance (CCA). ....
See page 8 from http://www.cra-arc.gc.ca/E/pub/tg/t4036/t4036-08e.pdf
New siding on exterior wall = capital expenses = couple years
Patching cracks in ext. wall = current expenses = same year
....Current or operating expenses are recurring expenses that provide a short-term benefit. For example, a current expense is the cost of repairs you make to keep a rental property in the same condition as it was when you acquired it. You can deduct current expenses from your gross rental income in the year you incur them.
Capital expenses provide a benefit that usually lasts for several years. For example, costs to buy or improve your property are capital expenses. Generally, you cannot deduct the full amount of these expenses in the year you incur them. Instead, you can deduct their cost over a period of several years as capital cost allowance (CCA). ....
See page 8 from http://www.cra-arc.gc.ca/E/pub/tg/t4036/t4036-08e.pdf
New siding on exterior wall = capital expenses = couple years
Patching cracks in ext. wall = current expenses = same year
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QUOTE (garycote @ Jan 20 2009, 07:54 PM) Are building repairs 100% tax deductible?
yes .. but you could choose to capitalize the improvement and then amortize over the life time of this improved asset (say a roof, or a new set of windows) .. but some argue (supported by case law) that even a brand new roof (for, say $25,000) to replace a leaky one can be expensed in one year !
Anything which is an addition should be capitalized and amortized (say a new elevator that was not there before).
Even accountants differ in their view of "what is an expense" and "what is a capital asset to be amortized" !!
yes .. but you could choose to capitalize the improvement and then amortize over the life time of this improved asset (say a roof, or a new set of windows) .. but some argue (supported by case law) that even a brand new roof (for, say $25,000) to replace a leaky one can be expensed in one year !
Anything which is an addition should be capitalized and amortized (say a new elevator that was not there before).
Even accountants differ in their view of "what is an expense" and "what is a capital asset to be amortized" !!
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OK say I have a principal residence I`ve lived in since April of 07 and April/May of 09 I want to turn it into a rental. I`ve renovated extensively over the past 2 years and am now finishing the interior to prepare for sale or rent. Obviously makes more sense to make it a rental at this time.
How much of the reno expenses can I actually expense for the 09 tax yr. and how much of them going back?
How much of the reno expenses can I actually expense for the 09 tax yr. and how much of them going back?
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Ed, my understanding is that renos are Capital Costs, and therefore, cannot be expensed. It does not matter how long you have owned the ppty, or when you did the work. They will get added to the Capital Cost Adjustment of the house, and thus be eligible for CCA.
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QUOTE (thomasbeyer2000 @ Jan 21 2009, 11:31 AM) yes .. but you could choose to capitalize the improvement and then amortize over the life time of this improved asset (say a roof, or a new set of windows) .. but some argue (supported by case law) that even a brand new roof (for, say $25,000) to replace a leaky one can be expensed in one year !
.......
Hello Thomas.
I bought a couple months ago my first rental using Dons book as motivation. I want to replace the very old windows with new windows.
Can I really expense the costs for that in 2009?
Thank you very much for your opinion.
Best regards,
Alex.
.......
Hello Thomas.
I bought a couple months ago my first rental using Dons book as motivation. I want to replace the very old windows with new windows.
Can I really expense the costs for that in 2009?
Thank you very much for your opinion.
Best regards,
Alex.
Building repairs are 100% deductible in the year you incur the expense. A repair is defined as the cost to put the property in its orignal condition. Eg- If replace carpet with carpet- it is a repair- if you replace it with Lino- it is an improvement regardless of cost considerations
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Navaz. Thank you, I got your point.
If I replace old laminate with new laminate- it is a repair. If I replace old laminate with carpet it would be improvement.
Talking about windows: This means I would have to replace my wooden windows again with wooden windows, because using any other kind would be improvement.
I will discuss it with my accountant.
Thank you all,
Alex.
If I replace old laminate with new laminate- it is a repair. If I replace old laminate with carpet it would be improvement.
Talking about windows: This means I would have to replace my wooden windows again with wooden windows, because using any other kind would be improvement.
I will discuss it with my accountant.
Thank you all,
Alex.