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posted Feb 28, 2023 9:29:43 PM

When calculating the portion of expenses to claim on a rental property, can I base it on availability vs. actual weeks rented?

I have a property that I use as a short term rental for a portion of the year. I know I can't right off 100% of expenses, but am wondering if it would be appropriate to determine the amount based on the number of weeks I have my property advertised/available for rent. The alternative would be to only count the number of weeks that actually rented, which would be fewer. Logically, it makes sense to base it on the weeks available for rental, but I'm wondering how CRA would view this.

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Level 4
Mar 2, 2023 10:08:25 AM

You will declare ALL income and expenses associated to your rental as long as it is up for rent. On that note if you are living in the space while not rented, then you would not claim the expenses such as hydro, etc.

Here’s a high-level view of how to calculate rental income, expenses and losses with a view towards minimizing your taxes:

  1. Calculate your gross rental income. This includes all rent payments you receive in cash, by cheque, or via money transfer.
  2. Calculate your expenses. The Canada Revenue Agency (CRA) lists out all eligible rental expenses landlords can claim. The more eligible expenses you claim, the more you’ll reduce your taxes.
  3. Complete the Statement of Real Estate Rentals form (T776)

When your rental expenses are higher than your gross rental income (the amount you receive before deducting expenses), this is considered a rental loss. You can deduct it against your other sources of income.

 

If your rental property is in another municipality, you can deduct travel expenses you paid to collect the rent or to maintain the property. You can only deduct expenses related to your rental property but not boarding and lodging.

You can claim the repairs and maintenance, and mortgage interest.  It will cause a loss that can be used in the future against a profitable year. Please visit TurboTax FAQs: Can I claim rental expenses on a property while it is vacant and while rent isn't being paid?

You can claim a tax deduction for fees paid towards advertising your rental property. Newspapers, websites, and trade publications are all good places to advertise and claim a tax deduction. Unlike property insurance and utilities, claim the full amount of advertising since it relates fully to your rental property. If you spend $500 to advertise your vacant apartment in the newspaper for a month, you can claim the full amount as an advertising expense on your tax return.

 

Please visit TurboTax page: Claiming Expenses on Rental Properties

Vacation Rental by Owner: What renting your cottage means at tax time 

Canada Revenue Agency Page: Rental Income

 

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