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My question is: Canadian-specific
QUESTION: We have an illegal basement suite in our home that we have just started renting out. We don't know if we should claim the income. If we claim the income we will have an extra $100 per month after taking off the expenses including the mortgage interest. Therefore I don't see the benefit
of claiming this income.
The expenses that I have taken into consideration are mortgage interest, taxes, utilities and I have only used 30% of these since this is the percentage of the house that is the basement suite.
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david ingram replies:
Believe it or not, it is a criminal offence to file your tax return without reporting the rental income.
It is up to you to claim the rental expenses. You should file a T776 and report the net income or loss on line 126. If there is a profit, you will pay tax. If there is a loss, you will get a refund. Refunds are good.
Find form T776 at: http://www.ccra-adrc.gc.ca/E/pbg/tf/t776/t776-01e.pdf
For more information about rentals, goto www.centa.com, click on tax guide and click on rental income.
Hope this helps
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) 980-0321 - 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."
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