My question is: Canadian-specific
QUESTION: Hi there, I currently own 5 rental properties in BC and AB. I've been told that if you own more than 3 your ventures could be considered a business making trips to look at real estate, gifts to realtors, etc. deductible; is this true, and if so what else could be deducted from the business? Thanks
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david ingram replies:
Well if you want to make buying and selling real estate a business you can do so with one property. Of course, you will pay full taxes on any profits which means more than twice as much tax because it also moves you to a higher tax bracket.
At that point you could fill in form T2124 and deduct whatever you find as a deduction on that form. Even then, it is a question as to whether you can dedcut trips to look at real estate. The general consensus us that you can add the cost of the trip to the ACB if you "buy" a unit and lose the deduction if you do not buy. AND trips to Jamaica, Hawaii, Spain, etc are NOT dedcutible even if you already have a property there.
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