Quantcast
Upgrades on a New Build Rental. Tax deductible? - Beyond.ca - Car Forums
Results 1 to 3 of 3

Thread: Upgrades on a New Build Rental. Tax deductible?

  1. #1
    Join Date
    Apr 2009
    Location
    Calgary
    Posts
    26
    Rep Power
    0

    Default Upgrades on a New Build Rental. Tax deductible?

    After filing my taxes, I realized I may have a potentially unclaimed deduction on the upgrades I purchased. The situation is:

    - New build home. Rented out starting from my possession date so I've never lived there.
    - $1k in upgrades went into the house. Paid in cash outside of the mortgage.

    Am I able to claim that $1k in upgrades as a rental expense? If so, is it a simple entry into one of the Rental Income Expense Lines or does it fall under that Capital Cost Allowance section? Also, assuming I used my Line of Credit to pay for those upgrades, is the interest on the money borrowed for those upgrades deductible as well?

    Any accountants, or people in the know, able to chime in on this? I'll be checking with my accountant on the weekend but I'm curious to know where I stand before hand.

  2. #2
    Join Date
    Jan 2004
    Location
    Calgary, Alberta
    My Ride
    2016 MB C450
    Posts
    8,129
    Rep Power
    25

    Default

    http://www.cra-arc.gc.ca/tx/bsnss/tp.../crcp-eng.html

    Since I don't know what the $1K is for, you should determine for yourself if you want to risk it.

    But I'm guessing it's capital expenses and since the house is new, you probably can't deduct anything.

  3. #3
    Join Date
    Feb 2003
    Location
    Calgary
    My Ride
    '11 S4 Blue German Monster
    Posts
    960
    Rep Power
    17

    Default

    Interest used to earn investment income is deductible (aside from RRSP), so yes.

    The above link is crystal clear on expense vs. capital. With CRA, take a position that is defensible and ensure it passes the smell test. There is no written rule, but generally items under $500 are expensible and worthless to track in a CRA class.

    In your situation, I am 99.9% positive it is a capital expense as you classified it an upgrade and therefore should be added to ACB of your property.
    "I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered."
    -Thomas Jefferson 1802

Similar Threads

  1. New build upgrades?

    By J-D in forum Real Estate / Finance
    Replies: 24
    Latest Threads: 10-26-2014, 08:58 PM
  2. Interior Upgrades in New Build

    By Deeznuts in forum Home and Garden
    Replies: 10
    Latest Threads: 03-20-2014, 01:01 PM
  3. New Build, Upgrades, Renovations, etc..

    By roopi in forum Real Estate / Finance
    Replies: 4
    Latest Threads: 11-17-2012, 06:17 PM
  4. Tax Deductible Mortgage Freedom Program?

    By guessboi in forum Real Estate / Finance
    Replies: 6
    Latest Threads: 09-20-2008, 04:34 AM
  5. Mortgage payments tax deductible?

    By billy36 in forum Real Estate / Finance
    Replies: 16
    Latest Threads: 06-13-2006, 02:42 PM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •