Personal Finance

Can you use your rental revenue loss against your regular income?

  • Last Updated:
  • Jan 21st, 2019 1:51 pm
[OP]
Sr. Member
Jun 13, 2008
770 posts
93 upvotes

Can you use your rental revenue loss against your regular income?

I own a property that was not used at all in 2018.

I'm filing my taxes and I was wondering if I can deduce the interests, electricity, municipal taxes, condo fees from my income. Are there any restrictions?

Also side question, if you're not currently worried about cashflow, should I avoid claiming the CCA? (Since it's likely the property will gain value when I sell it)
4 replies
Sr. Member
Nov 13, 2006
907 posts
522 upvotes
If it's a sole proprietor then yes you can.

You can't use cca to create a loss or increase a loss.
Sr. Member
User avatar
Dec 24, 2007
771 posts
690 upvotes
BC
bigcortex wrote:
Jan 17th, 2019 10:39 am
Also side question, if you're not currently worried about cashflow, should I avoid claiming the CCA? (Since it's likely the property will gain value when I sell it)
Not a good idea re: claiming CCA since on the sale of the property all of the CCA previously claimed over the years will be "recaptured" in that year and added back to income, which might kick you into a higher tax bracket since it will be on top of the capital gain you will have.
Deal Addict
Feb 21, 2004
1370 posts
168 upvotes
Montreal
OP, depends where you are also.

In Quebec, you can't do that on your provincial income tax report but yes on your federal. Furthermore, be prepared to provide CRA proof that you actively attempted to rent it out (ads, etc...) in case they come asking. If you did NOT attempt to rent it out actively, they might refuse the deduction claims you submit.

As for CCA, it's a loaded question with a lot of variables. Strictly speaking, if you abide by the concept that a dollar in 2019 is worth more now than a dollar in the future, it makes sense to claim CCA. HOWEVER, if you know for certain that you will be in a higher tax bracket in the future in the year you sell, then it might not be for you.

In my example, I am already in the top bracket so I DO claim CCA as it cannot get any worse for me, in my situation.
Got Heat?
[OP]
Sr. Member
Jun 13, 2008
770 posts
93 upvotes
HoTiCE_ wrote:
Jan 21st, 2019 10:22 am
OP, depends where you are also.

In Quebec, you can't do that on your provincial income tax report but yes on your federal. Furthermore, be prepared to provide CRA proof that you actively attempted to rent it out (ads, etc...) in case they come asking. If you did NOT attempt to rent it out actively, they might refuse the deduction claims you submit.

As for CCA, it's a loaded question with a lot of variables. Strictly speaking, if you abide by the concept that a dollar in 2019 is worth more now than a dollar in the future, it makes sense to claim CCA. HOWEVER, if you know for certain that you will be in a higher tax bracket in the future in the year you sell, then it might not be for you.

In my example, I am already in the top bracket so I DO claim CCA as it cannot get any worse for me, in my situation.
Thanks,
In Quebec, can you use the loss to offset the rental revenue in a future year?

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