Is CCA worth electing for one rental property?

[skiesoffire]

I have done alot of research to figure out the mechanics of CCA and short of actually going to an accountant to figure this out, I have not been able to decide if it is worth it to claim CCA due to the fact that there may be recapture. I figure the next best thing is to claim CCA on furniture or appliance additions only (not to take it on the building) because they will eventually wear out and I can clear out UCC and take a terminal loss for that class. 

Can you provide advice on if it is worth the work to calculate and claim CCA as it is optional? What questions or factors should I be considering? Is it valid to claim CCA only things that will eventually be worn out to avoid recapture like the furniture example?

I rent out a few rooms in my one home where it is also my primary residence. This is not for business.

[TurboTaxJeffrey · Accepted solution]

Especially if it is part of your primary residence that you are renting out...do not claim CCA on the building.  If you do, then you lose the primary residence exemption if and when you sell your home, and then would have to pay tax on any capital gains realized from the sale.  

For any appliances furniture etc, sure make the claim.

https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-...

[denverpoole76]

I have yet to find a great resource to determine whether I should claim CCA on my rental property or not. What I am reading here is that if you have a rental apartment in your primary residence then you shouldn't. But what if you have a rental apartment in your primary residence and also have another rental property profiting approx. $10,000/ per year?

What are the factors to decide whether or not to claim CCA on a rental property? Here is what I think it depends on:
1.  the rental property is appreciating or depreciating in value?
2.  employment income of the landlord, likely to increase or decrease?
3.  the projected rate of inflation over the time of purchase to sale of the property?
4.  Personal preference such as do you need a larger refund today or can you wait and pay a bit more in   taxes year over year in order to save money on taxes later when you sell the property?

Can someone please comment or add to the list of deciding factors? Some scenarios of specific tax situations would be helpful as well! Thanks

[skiesoffire]

My Personal Takeaway from this (and I hope I got this right):
@denverpoole76  I took CCA on Class 8 or appliances furniture as @TurboTaxJeffrey stated as you can write off these things when they get replaced over the years. I read about how you can clear your UCC balance by claiming terminal loss in class 8 before the end of the year (assuming every asset in class 8 is disposed) and buying an replacement after tax season in January. Zeroing out UCC will help you avoid recapture.

I did not take anything else other than class 8 as you would risk the CRA taking away your personal residence exemption. You would save yourself thousands of dollars when you sell. I think the key point is that you dont want the CRA to think your running an business. HENCE, all your questions about factors in taking CCA is pointless unless you run an business. This is why @TurboTaxJeffrey recommended I do not take CCA on the building portion.

[queenietran73]

Is it worth claiming cca on new metal roof for a rental that is 100% rented out? Will it be recaptured at selling time? Rental will incur 200K+ capital gain which will put me in higher tax bracket.  How is the recapture being calculated. Let say roof cost 16k. How do i know what it is worth down the road? Let’s say in 5 years? Thanks for your input!