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Hi,
I have a house in which I live and I rent out the other (legal)
suite . If the rental property is a separate unit,
say an apartment in another building and not part of my house, it
is clearer. However, because the suite
makes up part of the house, can I deduct the following as rental
expenses?
1. Garden maintenance. The grass is cut by a gardener - with
receipts issued.
I also do some work like putting in flowers, pruning. I also
bought some gardening tools.
If I occupy half of the floor area, can I apportion 50% of the
costs of this as maintenance
of the rental property?
Yes the Form T776 provided by the CCRA clearly delineates a place
to put in the full amount and deduct a personal portion.
2. Is the subscription to Seminars and other real estate related
newsletters 100% deductible
or only 50% deductible?
To be deductible for "sure" a seminar should be a registered
educational course and cost more than $100.00. If deductible,
they would be 1005 deductible because they have nothing to do
with your personal part of the house.
In practice, the CCRA seems to allow the costs of real estate
oriented property management seminars against rental income.
The courts however have gone both ways. My favourite example was
Judge Delmar Taylor. In the J ALLEN HOWARD case in 1985, he
ruled against a Calgary lawyer who wrote his AMWAY seminars in
San Diego and Hawaii off. Then just to rub salt into the
lawyer's wounds, three years later in 1988, the same judge,
Delmar Taylor proceeded to "ALLOW' AMWAY seminars for MORRIS AND
GLORIA MICHAYLUK who had also attended AMWAY seminars in San
Diego and Hawaii.
And before that, in 1983, Judge Roland St Onge turned down AMWAY
US Seminar expenses and reduced (but did not eliminate) a claim
for $1,200 for cassettes and books to $200.00 for Gary C and Mary
J Graves. The Graves appealed however, and SIX YEARS LATER, in
1990, Judge MacKay of the Federal Court of Canada allowed TWO out
of the 4 US seminars because he defined them as "conventions" and
the law allows TWO conventions per year.
3. What about the cleaning of the rental suite when there is a
turnover of tenants?
If you pay someone else to paint, clean, and otherwise make the
suite ready for occupancy between tenants, the fees paid to them
are deductible. You CANNOT deduct the cost of your own labour.
Getting a suite ready for occupancy for the FIRST TIME is NOT
deductible. Those costs are considered "capital" in nature and
are added to the Adjusted Cost Base of the property.
David Ingram
david ingram - [email protected]
108-100 Park Royal South
West Vancouver, BC, CANADA, V7T 1A2
(604) 913-9133 - (604) 913-9123 www.centa.com
Cell is (604) 657-8451 (10 AM to 10 PM seven days a week)
US / CANADA / MEXICO
Working Visa and Income Tax Specialists
Be ALERT, the world needs more "lerts"
THANK YOU very much for your anticipated reply.
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