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Hi David,
As that time approaches I am preparing my figures for filing income tax
(to make your job easier when i visit). I earn income from employment,
pension, and 3 rental properties.
1 Can I deduct travel expenses to investigate investment opportunities?
2 " travel expenses to meet with investment partners?
3 " building depreciation that I did not claim last year? (i.e., last
year I was entitled to 2%, this year 4%, can I claim 6%)?
4 If i am missing 2 of my 12 monthly phone bills, can I estimate & deduct
them by averaging the 10 I do have?
5 When can I hire you that will be tax deductible on the 2004 return?
thanks,
GXXXXXX.
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david ingram replies:
1. Travel expenses to investigate investment opportunities are a Capital expenses and not deductible against day to day income. The travel expenses to investigate should be added to the ACB of the eventual investment and will come off the eventual capital gain.
2. Same thing
3. Canada does not let you stack it. We did not claim "up to 2%" last year because you can only claim depreciation up to the amount of profit. No profit, no depreciation. If you have a rental profit "this" year you can claim "up to" 4% or as much as is necessary to eliminate the profit if it does not exceed 4%.
4. The answer is yes in practice but "no" in an audit from something like the phone company which can always reproduce any copy of last year's phone bills. I cannot reiterate enough, that you should keep all bills no matter how small. The CCRA is turning down ALL unvouchered expenses in audits today.
5. Anything you spend on me now in 2004 is deductible against the 2004 return in 2005. We will deduct the 2002 expense now against the 2003 rentals.
David Ingram's US/Canada Services
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