Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
EnglishEN

Pick a language

Français English
Announcements
For information on tax filing and Covid-19, please see The Covid-19 Tax Info Center
cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
New Member

I claim 40% for basement suite for utilities & such ... we put new roof on the house we and tenants live in....do I claim 100% or only 40%?

 
1 Best answer

Accepted Solutions
New Member

I claim 40% for basement suite for utilities & such ... we put new roof on the house we and tenants live in....do I claim 100% or only 40%?

"Rental Income

Whether you are renting out a room in your house, a basement apartment or an investment property, you have to report the income to the CRA. You need to complete and file Form T776 (Statement of Real Estate Rentals) with your income tax return. On this tax form, you declare the rent received from your tenants. You can also claim expenses for your rental property. If you rent out your principal residence, you can claim a tax deduction for the percentage of the expenses (based on square footage or percentage of living space) that the rental suite occupies. For example, if you rent out your basement apartment and it occupies 40 percent of your home, you claim 40 percent of your household expenses. Expenses you can claim include heat, hydro, water, home insurance and mortgage interest.

The only exception when you do not have to report rental income to the CRA is when you rent a room below fair market value. For example, if you rent a bedroom in your home to your adult child for $25 per week until he can find a permanent home, you are not required to report the income to the CRA. However, your child cannot claim a rent credit (available in certain provinces) as this is considered to be a cost-sharing arrangement.

Maintenance and Repairs

You have to be careful with the tax treatment of any repairs and maintenance you perform on the property. You can claim CCA for any long-term renovations, such as a new roof or windows, but it has tax implications. If you rent out your principal residence, claiming CCA means that you have to pay capital gains when you sell your home. The depreciation you claim over the years with CCA is added back when you sell your property; this is known as recapture.

Many landlords subsidize their mortgage by renting the basement in their principal residence. When you rent out your family home, you have the option of claiming CCA. If you decide to claim CCA, it leads to tax savings in the short term, but you have to pay capital gains when you sell your home. On the other hand, you can decide not to claim CCA; you do not get to depreciate major renovations, such as a furnace, but you do not pay capital gains when you sell your house."

Source: http://turbotax.intuit.ca/tax-resources/taxes-and-rental-properties/purchasing-a-rental-property.jsp

View solution in original post

1 Reply
New Member

I claim 40% for basement suite for utilities & such ... we put new roof on the house we and tenants live in....do I claim 100% or only 40%?

"Rental Income

Whether you are renting out a room in your house, a basement apartment or an investment property, you have to report the income to the CRA. You need to complete and file Form T776 (Statement of Real Estate Rentals) with your income tax return. On this tax form, you declare the rent received from your tenants. You can also claim expenses for your rental property. If you rent out your principal residence, you can claim a tax deduction for the percentage of the expenses (based on square footage or percentage of living space) that the rental suite occupies. For example, if you rent out your basement apartment and it occupies 40 percent of your home, you claim 40 percent of your household expenses. Expenses you can claim include heat, hydro, water, home insurance and mortgage interest.

The only exception when you do not have to report rental income to the CRA is when you rent a room below fair market value. For example, if you rent a bedroom in your home to your adult child for $25 per week until he can find a permanent home, you are not required to report the income to the CRA. However, your child cannot claim a rent credit (available in certain provinces) as this is considered to be a cost-sharing arrangement.

Maintenance and Repairs

You have to be careful with the tax treatment of any repairs and maintenance you perform on the property. You can claim CCA for any long-term renovations, such as a new roof or windows, but it has tax implications. If you rent out your principal residence, claiming CCA means that you have to pay capital gains when you sell your home. The depreciation you claim over the years with CCA is added back when you sell your property; this is known as recapture.

Many landlords subsidize their mortgage by renting the basement in their principal residence. When you rent out your family home, you have the option of claiming CCA. If you decide to claim CCA, it leads to tax savings in the short term, but you have to pay capital gains when you sell your home. On the other hand, you can decide not to claim CCA; you do not get to depreciate major renovations, such as a furnace, but you do not pay capital gains when you sell your house."

Source: http://turbotax.intuit.ca/tax-resources/taxes-and-rental-properties/purchasing-a-rental-property.jsp

View solution in original post