Rental Income and Expenses

With the new Precedence Tax Filing Initiative, we want to get started on Rental Property income and expenses.  

There are areas of the Rental Schedule that are straightforward and areas that are commonly prepared incorrectly.  The attached rental spreadsheet lists thecommon expenses.

We ask that the spreadsheet and additional details and questions are completed and uploaded to the tax portal by February 28.

Important Reminder

As our team grows please sure to include all information even though you have discussed with a team member outside the tax team. Leaving out important information could lead to filing errors.

Key Items in completing the Rental Income and Expense Spreadsheet

·      Be sure to complete the address, units, purchase price, date and shareholders as noted at the top of the spreadsheet.

·      Total expenses in each category are required.  Monthly totals are not a requirement.  The monthly ledger is provided only for easein entering and organizing information.

·      Receipts are not required to be provided unless you have questions on certain claimable expenses.

·      The bottom left corner of the spreadsheet allow for additional details and questions you have.

Items that are often miss-prepared

Professional Fees

·      Professional fees include tax filing fees.  Any professional fees for the purchase or sale of the property should be list separately as these fees get added to the cost of the property.

Repairs and Maintenance - Current Expenses

·      Current expenses can be deducted in the year incurredand would include items to maintain the property such as paint, light bulbs,door knobs, fix a baseboard etc.

·      If you would like the expenses reviewed to confirm they are correct between a current and capital expense each item should be list individually for review.

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Repairsand Maintenance - Capital Expense

·      If expenses are to upgrade, enhance the value of the property or has a long-lasting life it would be a capital expense.  Some examples include: new flooring, countertop, windows etc.

·      If you would like the expenses reviewed to confirm they are correct between a current and capital expense each item should be list individually for review.

Travel Expenses - if you own 1 rental

·      Motor vehicle expenses can be claimed if you earn rental income, you do part of the repairs and transport tools and materials to the property for those repairs.

·      You cannot deduct motor vehicle expenses you incur to collect rents.

Travel Expenses- if you own 2+ rentals

·      If you own more than 2 rental properties, you can claim motor vehicle expenses to collect rents, supervise repairs and manage the properties.

Common Rental Expenses

·      Common rental expenses for multiple properties could include items such as tax filing fees, bank fees etc.

·      Please list Common expenses in total on one property only and the expenses will be split evenly among the properties.

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