My question is: Canadian-specific
QUESTION: Dear David
I was told recently that if you rent a
live/work space in a commercially zoned
area (i.e gastown) you can write off 70%
of your rent? Are there other tax benefits
from living in a live work space ?
thanks
BXXXXXXX
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david ingram replies
If you do not use the space as a full time office or studio or the major
source of income for you, you can NOT deduct anything.
My personal record for making the deduction is/ was 80% after a fight with
appeals. In that one, we proved that the taxpayer never slept there (he had
a lady friend whose house he slept at and has since married), rarely ate
there with the exception of guests and clients. In fact, He regularly let
his out of town clients use the sleeping area. In spite of the fact that he
did NOT use it as a residence period, they still took the bedroom area which
he "could" have used and made it a personal portion.
On the other hand, if he did not have a bedroom area and made it a 100%
office, he could have deducted 100% which was what we had tried for in the
first place.
For most people who have their place set up as a working AND living space, I
would think that 70% would be too high. For instance, if you use the
bathroom at night when you live there, the dual use bathroom is not
deductible. If you have a Television in a living area that you meet clients
in but also use for your personal use at night, the dual use living room is
not deductible. If you use the kitchen to prepare your own meals once a day
and use it to make coffee and snacks for your clients six times a day, the
dual use kitchen is not deductible.
In other words, to deduct part of your home as a business decoction, it must
be a dedicated area with no personal use period.
Further, to deduct any space in your residence, you have to be making a
profit. Offices / studios / workshops / storage / etc. in your personal
residence, can only be used as a deduction against the business operating
out of the space.
You should come out to one of our "making your mortgage interest deductible"
seminars.
There is one TONIGHT as follows: (anyone can call (604) 731-8900 to register
for a seat.
Every Thursday evening Fred Snyder and I hold a free seminar at Fred's
office at 1764 West 7th (corner of Burrard in the Spence Diamond building)
in Vancouver.
The topics are:
Seg funds and an alternative to the traditional RRSP.
Making your mortgage income tax deductible
Critical Care insurance for disasters.
coffee and sometimes cookies of course.
Phone 604-731-8900 to reserve your seat -and, you are welcome to bring your
brother, your sister, your mother or father, your children, your best
friend, your worst enemy or your own financial advisor who hasn't explained
how to make your mortgage deductible.
AND
Answers to this and other similar questions can be obtained free on Air
every Sunday morning.
Every Sunday at 9:00 AM on 600AM in Vancouver, Fred Snyder of Dundee Wealth
Management and I, David Ingram host a LIVE talk show called "ITS YOUR
MONEY"
Those outside of the Lower Mainland will be able to listen on the internet
at
www.600AM.com <http://www.600am.com/>
Local calls are taken at (604) 280-0600 and Long Distance calls are taken at
1( 866) 778-0600
Callers to the show are invited to attend free seminars on financial
planning with such specialities as deductible mortgage interest. They are
held at Fred Snyder's Office at 1764 West 7th in Vancouver - (604) 731-8900
for more information.
=========================================
David Ingram's US/Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
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Res (604) 980-3578 Cell (604) 657-8451
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Email to taxman at centa.com <mailto:taxman at centa.com>
www.centa.com <http://www.centa.com> www.david-ingram.com
<http://www.david-ingram.com/>
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