QUESTION: Hello! Love your site! I purchased my condo new in 1994 and lived in it briefly (until 1996) before purchasing another property. I have subsequently rented my condo out since 1996 and then in 1999 (approx) there were leaks discovered etc etc. The current assessment is approx 47k! and work is scheduled to start this fall. As I have been reporting income (and paying tax on the profit!) on this unit since 1996, can I safely assume that all leaky condo expenses (including legal fees) can be written off 100%, and that I will not have to capitalize regardless of whether the building materials have changed? (They are changing from stucco to hardy board.) I am unsure whether they would consider the exerior change as an "improvement" when in fact it is just obviously repairing this structure to original condition with alternative products. I called the CCRA and they were unclear but felt it might an improvement??? I'm not sure how they come up with that? Any special hints or considerations when submitting my personal taxes this year end to ensure a problem free process? Do I need an actual invoice from the strata? Or will the master list of units and associated assessments (plus my cancelled cheque) be sufficient? Will they question this write off at all? I usually e-file. I've heard that e-filing can contribute to red flags and audits if the y/e is unusual.!? Thank you.. This is difficult enough without having to worry about this aspect too! SXXXXXXX ======================== david ingram replies: The leaky expenses should be deductible because you did not know about the leaky situation when you started renting it out. NO ONE can guarantee that the CRA (new name) will not challenge it, but it has been my experience that true rental leaky condos are being allowed the repairs as expenses with no improvement calculation imputed. On the other hand, those who move out of a leaky condo and rent it because the "repairs will be deductible" ARE having the repairs added to capital because they knew about the situation when it was a personal residence. Keep your Bills. Do NOT submit anything with the return other than the T776 with the large loss. DO NOT EFILE the return if you have student, RRSP, medical, charitable, business or rental expenses. It is my feeling that your chance of an audit increases dramatically. In particular, you can expect a letter in October asking to see the medical expenses, or see the charitable, or see the RRSP receipt. Although not an audit, I assure you it is easier to "just send them in" with the return than to spend two or three or four hours digging things out in October or November, particularly if they are looking at two or three years. I have an interesting input into this at the COLCO (Coalition of Leaky Condominium Owners) site, www.myleakycondo.com - specifically at http://www.myleakycondo.com/ingram.htm 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 Cartier Partners and I will be hosting an INFOMERCIAL but 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 Local phone calls to (604) 280-0600 - Long distance calls to 1-866-778-0600. Old shows are archived at the site. This from ask an income tax immigration planning and bankruptcy expert consultant guru or preparer from www.centa.com or www.jurock.com or www.featureweb.com. Canadian David Ingram deals daily with tax returns dealing with expatriate: multi jurisdictional cross and trans border expatriate gambling refunds for the United States, Canada Mexico Great Britain the United Kingdom, Kuwait, Dubai, Saudi Arabia, South Africa, Thailand, Indonesia, Egypt, Antarctica, Japan, China, New Zealand, France, Germany, Spain, Italy, Russia, Georgia, Brazil, Peru, Ecuador, Bolivia, Scotland, Ireland, Hawaii, Florida, Montana, Morocco, Israel, Iraq, Iran, India, Pakistan, Afghanistan, Mali, Bangkok, Greenland, Iceland, Cuba, Bahamas, Bermuda, Barbados, St Vincent, Grenada,, Virgin Islands, US, UK, GB, American and Canadian and Mexican and any of the 43 states with state tax returns, etc. income tax wizard wizzard guru advisor advisors experts specialist specialists consultants taxmen taxman tax woman planner planning preparer of Alaska, Alabama, Arkansas, Arizona, California Denver Colorado, Connecticut, Delaware District of Columbia Miami Florida, Garland Georgia, Honolulu Hawaii, Idaho, Illinois, Indiana Des Moines Iowa Kansas Kentucky, Louisiana Bangor Maine Maryland Boston, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico,New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon. Paris, Rome, Sydney, Australia Hilton Pennsylvania, Rhode Island, Rockwall, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, West Virginia, Wisconsin, Wyoming, British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec City, New Brunswick, Prince Edward Island, Nova Scotia, Newfoundland, Yukon and Northwest and Nunavit Territories, Mount Vernon, Eumenclaw, Coos Bay and Dallas Houston Rockwall Garland Texas Taxman and Tax Guru and wizzard wizard - David Ingram's US/Canada Services US/Canada/Mexico Tax Immigration & working Visa Specialists US / Canada Real Estate Specialists 4466 Prospect Road North Vancouver, BC, CANADA, V7N 3L7 Calls accepted from 10 AM to 10 PM 7 days a week Res (604) 980-3578 Cell (604) 657-8451 Bus (604) 980-0321 davidingram at shaw.ca 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 & the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent financial, or real estate planner or advisor & appropriately qualified legal practitioner, tax or immigration specialist in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included." -------------- next part -------------- An HTML attachment was scrubbed... URL: http://www.centa.com/CEN-TAPEDE/centapede/attachments/20040825/61dd53b4/attachment.htm
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