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Hi David, so sorry to hear about your domestic situation. I have
been asked whether the large assessments levied by Strata
Corporations to pay for water damage repairs to leaky condos, can
be deducted from an owners personal income tax when they have
moved out and rented the unit.It would seem to me that
deductibility may depend on when rental started relative to when
the assessments started, so that depending on the timing an owner
could deduct as an " unforseen expense"? Also I have heard that
politically the Feds up to now have " turned a blind eye", where
some of these multi thousand $$ deductions have been made against
rental income. I'd appreciate your opinion and experience on this
issue. Thanks in advance, Keith.
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David Ingram replies.
Since I know that your Andre Molnar building, was one of the more
expensive buildings to repair, I presume you are talking about
your own building.
So let's look at two different owners.
The first bought the apartment as an investment TO RENT OUT. He
or she gets to deduct the special assessment against their total
income from all sources.
The second owner heard that the first owner could write off the
leaky expenses because it was rented and moved out and tried to
deduct the expenses. Because they knew the expenses were coming
up, the expenses are not deductible but must be added to the
undepreciated capital cost of the building.
It is NOT a grey or gray area. It is black and white.
And yes, lots of people have read some pamphlet telling them that
they can write off the expenses if they rent out the suite. Not
true and if CCRA finds it, they will reverse the expenses and
yes, I have seen several where it has happened.
I know of no situation where the feds have turned a blind eye.
And, if an employee did knowingly turn a blind eye, they would
lose their job.
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) 913-9133 - Fax 913-9123 [email protected]
www.centa.com www.david-ingram.com
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Be ALERT, the world needs more "lerts"
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