You can not deduct legal fees from buying a rental property. However, you can add it to the cost of land and building.
According to CRA, "You can deduct fees for legal services to prepare leases or collect overdue rents. If you incur legal fees to buy your rental property, you cannot deduct them from your gross rental income (line 8299). Instead, divide the fees between land and building and add them to their respective cost."
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Just to be clear, the lawsuit happened after the purchase of the home had been completed.
Because of that, is this situation still included as part of 'buying the rental property'?
If I include them in the cost of the building and land, that seems like I adding to the CCA instead. Is that correct?