blkoliger
New Member

Can I expense unspent rental condo reserve fund upon sale?

Did not capitalize or expense it as fund was not spent. CRA says it is a prepaid expense & cannot be deducted until it is spent. What do I do now that the condo has sold? CRA agent said add it to Adjusted Cost Base but not to T776. I already have a capital loss so that's no help.

Investors and rental owners

According to the CRA rules, if the expense isn’t considered to be “current” which appears to be the case, it must be capitalized. It’s not “lost”.  It will just increase the capital loss-which can be carried forward if there’s no capital gains to use it against this year or carried back to apply to previous losses.

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