Capital expense or repair in -

My question is: Canadian-specificQUESTION: We have bought a duplex, which were ocupied by tenants, last year in BC. During the house inspection before the purchase, We found the basement bathroom had major problem and decided to repair after we bought the property. Half month after we bought the property, the basement tenant moved out and we began repairing the bathroom. Becasue the place was vacant, we decided to also paint the interior walls, and replaced the carpet that was stained by cats. My questions are which parts of these repaires are capital expenses, which parts are maintenance expenses?

As described, the repairs are improvements and not deductibleimmediately.  They may be added to the cost of the building anddepreciated over the years.

In general, 'anything' you intend to do or know you are going to do toa rental property is a capital expense.  Therefre, if you buy a placeknowing it has a bad roof and you have to replace it right away,replacingthe roof must be added to the purchase price.

On the other handif you bought a place with a brand new roof withwarranty and a year later, had to replace it because it ws leaki9nglike a seive and the installer had gone brokle, the replacement wouldbe a repair.

If you had the building for ten years and the roof went and you decidedto raise it 2 feet so that you could put a coupe of rooms inthe attic,that would be an improvement in general although you could likleyclaimthe amount that the roof repair would have cost as a repair andcapitalize the rest.

Likewise with kitchens.  If you need to replace the counter tops($1,200) and end up replacing all the cabinets, tiling the floor andputting in new appliances for  $28,000, that is an improvementalthough, again, you could likely expense the $1,200.

goto www.centa.com, click on Tax Guide in the top left hand corner andread the Rental section for more examples of what the courts have said.
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On February 11, 2008, DavidIngram wrote:

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However, I regularly search for the words"PAYINGCUSTOMER" 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 notesto myself have been spammed out and as an example, as I wrote this onDec 25, 2007 since June 16th, my 'spammed out' box has47,941 unread messages, my deleted box has 16645 I have actually lookedat and deleted and I have actually answered 1234 email questions forclients and strangers without sending a bill.  I have also put aside847 messages that I am maybe going to try and answer because they lookinteresting. -e bankruptcy expert  US Canada Canadian American Mexican Income Tax service and  help
Therefore, if an email is not answered in 24 to48 hours, it is likely lost in space. You can try and resend it but if important AND YOU TRULY WANT OR NEEDAN ANSWER from 'me', you will have to phone to make an appointment. Gillian Bryan generally accepts appointment requests for me between10:30 AM and 4:00 PM Monday to Friday VANCOUVER (Seattle, Portland, LosAngeles) time at (604) 980-0321.  david ingram expert US Canada Canadian American  Mexican Income Tax  service and help.
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Disclaimer: This question has been answered without detailed information orconsultation and is to be regarded only as general comment.   Nothingin this message is or should be construed as advice in any particularcircumstances. No contract exists between the reader and the author andany and all non-contractual duties are expressly denied. All readersshould obtain formal advice from a competent andappropriately qualified legal practitioner or tax specialist for experthelp, assistance, preparation, or consultation  in connection withpersonal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must beincluded." e bankruptcy expert  US Canada Canadian American Mexican Income Tax  service and help.
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This is not intended to be definitivebut in general I am quoting $900 to $3,000 for a dual country taxreturn.
$900 would be one T4 slip one W2 slipone or two interest slips and you lived in one country only (but werefiling 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 onerental
 
$1,300 would be the same with onebusiness no rental
 
$1,300 would be the minimum with amove in or out of the country. These are complicated because of theback and forth foreign tax credits. - The IRS says a foreign tax credittakes 1 hour and 53 minutes.
 
$1,600 would be the minimum with arental or two in the country you do not live in or a rental and abusiness 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 andyou 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 andno capital gains, etc. for $200.00 up.
 
With a Rental for $400, two or threerentals for $550 to $700 (i.e. $150 per rental) First year Rental -plus $250.
 
A Business for $400 - Rental andbusiness likely $550 to $700
 
And an American only (lives in the USwith no Canadian income or filing period) with about the same things inthe same range with a little bit more if there is a state return.
 
Moving in or out of the country orpart year earnings in the US will ALWAYS be $900 and up.
 
TDF 90-22.1 forms are $50 for thefirst 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 - (maybeamalgamate 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 theCanadian return as a guide for seven years at a time will be from $150to$600.00 per year depending upon numbers of bank accounts, RRSP's,existence of rental houses, self employment, etc. Note that thesereturns tend to be informational rather than taxable.  In fact, ifthere are children involved, we usually get refunds of $1,000 per childper year for 3 years.  We have done several catch-ups where the clienthas recieved as much as $6,000 back for an $1,800 bill and one recentlywith 6 children is resulting in over $12,000 refund. 

This is aguideline not etched in stone.  If you doyour own TDF-90 forms, it is to your advantage. However, if we put themin the first year, the computer carries them forward beautifully.
 
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