QUESTION: Our principal residence has a basement apt. which we have been declaring rental income from the past 10 yrs. The split is 66/33 as to expenses. The tenant has full use of the backyard and this year we put in an inground pool. Can we claim the pool as CCA (66/33)? If so what class is it? This will be our 1st year declaring CCA and the documentation we have found (IT-472, #8h) says filtration systems for outside pool, pool-light, wiring,etc. is Class 8, unless included as a component part of the pool (Class 6)...but when we read up on Class 6 there is no mention of swimming pools..very confused...they don't make it easy!
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david ingram replies;
If you built the pool for the sole benefit of the tenants, you can
deduct 100% of the chemicals, electricity, repairs, filtration and
depreciation (CCA) on the pool. If you intend to use it personally for
your family or friends even just 'one' day of the year, you can NOT
deduct anything for the pool including the electricity filtration,
chemicals or increased water bill. NO DUAL USE PORTION OF A HOUSE IS
DEDUCTIBLE on a rental statement when the other user is the owner of the
house.
My own house is a good example. Those who have been here know that I
work upstairs in the Living Room 90% of the time. It is where I meet
weekday clients and it is where I answer emails and work into the wee
hours of the morning. No protion of the room where I do 90% of my work
is deductible. Neither is any part fo the upstairs bathroom which is
used by family and clients.
On the other hand, most of the ground floor is business oriented except
for one bedroom. The entrance is not deductible with a table and a
large photocopier, filing cabinet and stapling, hole punching stuff and
enveopes and paper, etc., because you have to go throuogh the entrance
to get to my daughter's bedroom and the upstairs of the house.
NEXT AND MORE serious. If you claim CCA on part of the structure of a
rental house that you live in, you are making that portion of the house
subject to Capital Gains Tax. Read the CRA Bulletin IT120R6 paragraph
32. http://www.cra-arc.gc.ca/E/pub/tp/it120r6/it120r6-e.pdf
This is not law, it is policy but you can clearly see that if you claim
CCA, the policy is to tax the building and I have seen this many times.
On the other hand, I have never personally seen the CRA tax a duplex or
a triplex or four-plex where the owner lives in one of the suites
because of the Saccomanno Case in 1986.
* In 1986, Fedel Saccomanno /won/* the sale of his home as a tax free
capital gain as his principal residence. He had bought a triplex with
two units rented out, and lived in the third unit with his wife on
weekends when he was not teaching at the University of Waterloo. When he
did not get tenure at Waterloo, and sold the property, DNR tried to tax
two-thirds of the profits. Judge Taylor ruled that the entire triplex
was tax free, giving credence to my claim in my Investment Guide. In the
Investment Guide, I suggest that people with duplexes and triplexes
should claim the whole building tax free in spite of the fact that
Bulletins IT 120R2 and R3 stated that half a duplex and two thirds of a
triplex would be taxable.
On February 11, 2008, David Ingram wrote:
It is very unlikely that blind or unexpected email to me will be
answered. I receive anywhere from 100 to 700 unsolicited emails a day
and usually answer anywhere from 2 to 20 if they are not from existing
clients. Existing clients are advised to put their 'name and PAYING
CUSTOMER' in the subject line and get answered first. I also refuse to
be a slave to email and do not look at it every day and have never ever
looked at it when I am out of town. */e bankruptcy expert US Canada
Canadian American Mexican Income Tax service and help/*
However, I regularly search for the words"PAYING CUSTOMER" and always
answer them first if they did not get spammed out. For the last two
weeks, I have just found out that my own email notes to myself have been
spammed out and as an example, as I wrote this on Dec 25, 2007 since
June 16th, my 'spammed out' box has 47,941 unread messages, my deleted
box has 16645 I have actually looked at and deleted and I have actually
answered 1234 email questions for clients and strangers without sending
a bill. I have also put aside 847 messages that I am maybe going to try
and answer because they look interesting. -*/e bankruptcy expert US
Canada Canadian American Mexican Income Tax service and help/*
Therefore, _if an email is not answered in 24 to 48 hours, it is likely
lost in space_. You can try and resend it but if important AND YOU
TRULY WANT OR NEED AN ANSWER from 'me', you will have to phone to make
an appointment. Gillian Bryan generally accepts appointment requests
for me between 10:30 AM and 4:00 PM Monday to Friday VANCOUVER (Seattle,
Portland, Los Angeles) time at (604) 980-0321. */david ingram expert
US Canada Canadian American Mexican Income Tax service and help./*
/david ingram's US / Canada Services/
US / Canada / Mexico tax, Immigration and working Visa Specialists
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My Home office is at:
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*(604) 980-0321* Fax (604) 980-0325
Calls welcomed from 10 AM to 9 PM 7 days a week Vancouver (LA) time -
(please do not fax or phone outside of those hours as this is a home
office) */expert US Canada Canadian American Mexican Income Tax
service help./*
email to taxman at centa.com <mailto:taxman at centa.com>
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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 for expert
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<http://www.centa.com/>. If you forward this message, this disclaimer
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Mexican Income Tax service and help./*
David Ingram gives expert income tax service & immigration help to
non-resident Americans & Canadians from New York to California to
Mexico family, estate, income trust trusts Cross border, dual citizen -
out of country investments are all handled with competence & authority.
*Phone consultations are $450 for 15 minutes to 50 minutes (professional
hour). Please note that GST is added if product remains in Canada or is
to be returned to Canada or a phone consultation is in Canada. ($472.50
with GST if in Canada)**/ /**/expert US Canada Canadian American
Mexican Income Tax service and help./*
This is not intended to be definitive but in general I am quoting $900
to $3,000 for a dual country tax return.
$900 would be one T4 slip one W2 slip one or two interest slips and you
lived in one country only (but were filing both countries) - no self
employment or rentals or capital gains - you did not move into or out of
the country in this year.
$1,200 would be the same with one rental
$1,300 would be the same with one business no rental
$1,300 would be the minimum with a move in or out of the country. These
are complicated because of the back and forth foreign tax credits. - The
IRS says a foreign tax credit takes 1 hour and 53 minutes.
$1,600 would be the minimum with a rental or two in the country you do
not live in or a rental and a business and foreign tax credits no move
in or out
$1,700 would be for two people with income from two countries
$3,000 would be all of the above and you moved in and out of the country.
This is just a guideline for US / Canadian returns
We will still prepare Canadian only (lives in Canada, no US connection
period) with two or three slips and no capital gains, etc. for $200.00 up.
With a Rental for $400, two or three rentals for $550 to $700 (i.e. $150
per rental) First year Rental - plus $250.
A Business for $400 - Rental and business likely $550 to $700
And an American only (lives in the US with no Canadian income or filing
period) with about the same things in the same range with a little bit
more if there is a state return.
Moving in or out of the country or part year earnings in the US will
ALWAYS be $900 and up.
TDF 90-22.1 forms are $50 for the first and $25.00 each after that
when part of a tax return.
8891 forms are generally $50.00 to $100.00 each.
18 RRSPs would be $900.00 - (maybe amalgamate a couple)
Capital gains *sales) are likely $50.00 for the first and $20.00 each
after that.
*Catch - up returns for the US where we use the Canadian return as a
guide for seven years at a time will be from $150 to $600.00 per year
depending upon numbers of bank accounts, RRSP's, existence of rental
houses, self employment, etc. Note that these returns tend to be
informational rather than taxable. In fact, if there are children
involved, we usually get refunds of $1,000 per child per year for 3
years. We have done several catch-ups where the client has recieved as
much as $6,000 back for an $1,800 bill and one recently with 6 children
is resulting in over $12,000 refund.
*
This is a guideline not etched in stone. If you do your own TDF-90
forms, it is to your advantage. However, if we put them in the first
year, the computer carries them forward beautifully.
This from "ask an income trusts tax service and immigration expert" from
www.centa.com <http://www.centa.com/> or www.jurock.com
<http://www.jurock.com/> or www.featureweb.com
<http://www.featureweb.com/>. David Ingram deals on a daily basis with
expatriate tax returns with multi jurisdictional cross and trans border
expatriate problems for the United States, Canada, Mexico, Great
Britain, United Kingdom, Kuwait, Dubai, Saudi Arabia, Thailand,
Indonesia, Japan, China, New Zealand, France, Germany, Spain, Italy,
Russia, Georgia, Brazil, Peru, Ecuador, Bolivia, Scotland, Ireland,
Hawaii, Florida, Montana, Morocco, Israel, Iraq, Iran, India, Pakistan,
Afghanistan, Mali, Bangkok, Greenland, Iceland, Cuba, Bahamas, Bermuda,
Barbados, St Vincent, Grenada,, Virgin Islands, US, UK, GB, and any of
the 43 states with state tax returns, etc. Rockwall, Dallas, San
Antonio Houston, Denmark, Finland, Sweden Norway Bulgaria Croatia Income
Tax and Immigration Tips, Income Tax Immigration Wizard Antarctica
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Reporting $10,000 cross border transactions Grand Cayman Aruba Zimbabwe
South Africa Namibia help USA US Income Tax Convention. Advice on
bankruptcy **/e bankruptcy expert US Canada Canadian American Mexican
Income Tax service and help ./**
*
***/
David Ingram expert income tax service and immigration help and
preparation of US Canada Mexico non-resident and cross border returns
with rental dividend wages self-employed and royalty foreign tax credits
family estate trust trusts income tax convention treaty advice on bankruptcy
/*
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Red Bank, Marystown, Cape Spears, Truro, Charlottetown, Summerside,
Niagara Falls, income trust, Income Tax Treaty Convention. -*/ e
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*/david ingram International non-resident cross border expert income tax
service & immigration help estate family trust assistance expert
preparation & immigration consultant, income trusts experts on rentals
mutual funds RRSP RESP IRA 401(K) & divorce preparer preparers
consultants Income Tax Convention Treaty. /**/advice on bankruptcy
expert US Canada Canadian American Mexican Income Tax help.
/*
*//*
Be ALERT, the world needs more "lerts". */ bankruptcy expert US
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