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posted Oct 30, 2019 10:19:47 PM

Hi I started subleasing property for airbnb in Dec 1 18. It made loss because i purchased furniture - where do i enter furniture purchase? In T776 Other expenses?

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1 Best answer
Level 11
Oct 30, 2019 10:19:49 PM

Furniture has long-lasting value so it's considered to be a capital asset. Capital assets are deducted over time - like depreciation. You'll enter the information relating to the furniture purchase (price, date of purchase, etc.) as an addition in the Capital Asset/CCA section of the T776 and a portion of the cost will be available to use as a deduction.

Furniture is a class 8 asset. There's a spot to choose the class as well in the Assets section.

It's import to note that CCA (Capital Cost Allowance) can't create or increase a loss. If you're already in a loss position before the furniture is added, your loss won't get any bigger by adding the furniture. If you're close to a loss, CCA will only bring you to an "even" situation" - no loss-no gain. 

But it's still important to add that furniture either way for two reasons

  1. In order to claim CCA in future years (even if you can't use CCA this year) you must enter the asset in the year it was purchased.
  2. By entering the furniture, you can choose how much of the CCA deduction for 2018 you'd like to use. If you're already in a loss situation, enter the furniture then opt to carry forward the deduction for future years. If you're close to a loss, choose to take a portion of the CCA deduction this year to bring your rental income to zero.

Look for the in-product help along the way in the CCA section. Lots of great info in there to guide you along! Plus, since you've opted for TurboTax Live Assist & Review, you can contact an expert at any time while you're preparing your return for individual guidance.

1 Replies
Level 11
Oct 30, 2019 10:19:49 PM

Furniture has long-lasting value so it's considered to be a capital asset. Capital assets are deducted over time - like depreciation. You'll enter the information relating to the furniture purchase (price, date of purchase, etc.) as an addition in the Capital Asset/CCA section of the T776 and a portion of the cost will be available to use as a deduction.

Furniture is a class 8 asset. There's a spot to choose the class as well in the Assets section.

It's import to note that CCA (Capital Cost Allowance) can't create or increase a loss. If you're already in a loss position before the furniture is added, your loss won't get any bigger by adding the furniture. If you're close to a loss, CCA will only bring you to an "even" situation" - no loss-no gain. 

But it's still important to add that furniture either way for two reasons

  1. In order to claim CCA in future years (even if you can't use CCA this year) you must enter the asset in the year it was purchased.
  2. By entering the furniture, you can choose how much of the CCA deduction for 2018 you'd like to use. If you're already in a loss situation, enter the furniture then opt to carry forward the deduction for future years. If you're close to a loss, choose to take a portion of the CCA deduction this year to bring your rental income to zero.

Look for the in-product help along the way in the CCA section. Lots of great info in there to guide you along! Plus, since you've opted for TurboTax Live Assist & Review, you can contact an expert at any time while you're preparing your return for individual guidance.