Rental Properties as a small business -

My_question_is: Canadian-specific
Subject:        Rental Properties as a small business
Expert:         taxman at centa.com
Date:           Monday January 29, 2007
Time:           05:07 PM -0500
QUESTION:
Thought I once heard that after you own 3 rental properties, it can be
considered a small business which will enable you to write off additional
expenses: ie home office in principal res.  Looked at the information on
your website and Revenue Canada's website, but couldn't find the answer.
---------------------------------
david ingram replies:
The CRA's own pamphlet on rental income states that you get a little more
deductions at two properties.  I have never heard the three theory.
However, unless you have tenants regularly attending at your home office or
it is your principal source of income, the deduction of a part-time
"records" office is not allowable.
For rentals to be considered an active business, the usual thought is that
you have to have FIVE FULL TIME EMPLOYEES WHO ARE NOT RELATED TO THE
SHAREHOLDER.
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