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Hi David
When do you have time to answer all these questions? Anyway I have one =
for you too.=20
I live in Canada and I am Canadian Citizen. I live in a house, but last =
year in March I bought an apartment (I have to mention that my husband =
lives and works in Seattle). Anyway, I=91ve been renting the apartment =
out this year and therefore I would like to be able to deduct the =
expenses. Do I have to keep all the receipts? How does it work? =
Obviously I do not have much experience with things like that.=20
I greatly appreciate your advice.
BXXXXX
Ps. I have to mention that I am the principal owner of both properties.
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david ingram replies.
You have to fill out a Canadian T776 rental schedule. On this schedule =
you will report the Gross Rent as income and then you will deduct your =
expenses.
Expenses can include but are not limited to:
* accounting
* advertising
* auto expense to collect rent if more than two or auto expense to =
transport tools and equipment if you make your own repairs or do your =
own maintenance
* cleaning
* interest on the first, second and third mortgage or a down payment =
loan and if you charge a repair or rental expense on your Visa or =
MasterCard, you can deduct the interest on that amount as well.
* legal fees to draft a lease or evict a tenant or collect rent (but =
not the purchase legal fees, those get added to the adjusted cost base =
of the unit)
* management fees
* rental agent commission
* repairs and maintenance
After you have calculated the profit or loss as the case may be, "IF" =
there is a profit you can also claim Capital Cost Allowance which is up =
to 2% of the undepreciated balance the first year and up to 4% in =
subsequent years.
Since I know you can and should be doing a joint tax return with your =
US husband (it will save him thousands) you will also have to convert =
the figures into US dollars and fill out Schedule E for the US 1040. If =
there was a profit in Canada and you paid Canadian Income Tax, you can =
claim a foreign tax credit on your US return on form 1116.
You should also go to www.centa.com click on tax guide and then click on =
rental income to get some more rental advice which although I wrote it =
twenty years ago is still apropos today.
David Ingram of the CEN-TA REALTY Group
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
108-100 Park Royal South
West Vancouver, BC, CANADA, V7T 1A2
(604) 913-9133 - Fax 913-9123 [email protected]
www.centa.com www.david-ingram.com
Disclaimer: This question has been answered without detailed =
information or consultation and is to be regarded only as general =
comment. Nothing in this message is or should be construed as advice =
in any particular circumstances. No contract exists between the reader =
and the author and any and all non-contractual duties are expressly =
denied. All readers should obtain formal advice from a competent and =
appropriately qualified legal practitioner or tax specialist in =
connection with personal or business affairs such as at www.centa.com. =
If you forward this message, this disclaimer must be included."
Be ALERT, the world needs more "lerts"
=20
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