Airbnb - Tax and Expense question

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Jan 4th, 2020 12:59 pm

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Jan 1st, 2020 8:12 pm

Kamloops [OP]: Deal Addict; Dec 23, 2005; 2151 posts; 343 upvotes; Canada

Jan 1st, 2020 8:12 pm

Airbnb - Tax and Expense question

So I just started up an AIRBNB at a ski resort condo I own. Had my 1st renters Dec 29th. I used it only has personal use up to that point but going to make it avail to airbnb for all of 2020. I am going to go see an accountant but curious if anyone here knows the answer to this. I spent a lot of cash to get it ready to rent in 2019. Can I claim what I spent to get it ready in 2019 even if I did not make revenue in 2019. The money I spent was to get it ready to rent in 2020 accept for the few days at the end of Dec. I did not get paid for that from airbnb until Jan as the period was Dec 29 to Jan 3rd.

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Jan 2nd, 2020 8:22 am

asifnana: Deal Addict; Nov 13, 2006; 1159 posts; 790 upvotes

Jan 2nd, 2020 8:22 am

Yes you can. This will fall under your T2125 in your 2019 tax return. Since you are claiming a loss with no income there is a 100% chance you will get reviewed by the CRA in late 2020. So make sure you keep all receipts/invoices and only claim for the documents you can get the backup for.

Jan 2nd, 2020 9:36 am

nx6288: Deal Addict; Jul 29, 2006; 4142 posts; 971 upvotes

Jan 2nd, 2020 9:36 am

Think you'll need to pro-rate the nightly amount of what falls into 2019 vs 2020.

Yes you can but depending on how much you spent to get it ready, are you willing to risk getting audited?

Also, keep in mind if you think you'll do really well with this Airbnb (>$30k/year), then you'll need to register for an HST account and also in the future if you ever decide to sell this property, it'll be seen as a commercial property and hence get taxed even further unless you do some creative corporate structure (see a specialized real estate accountant for this).

Jan 4th, 2020 11:32 am

goo421: Member; Jul 29, 2007; 280 posts; 180 upvotes; Markham

Jan 4th, 2020 11:32 am

Depending on what you spent on, some things may be considered capital and you'd have to claim CCA instead of writing it off as an expense immediately.

Jan 4th, 2020 12:59 pm

WetCoastGuy: Deal Addict; Dec 24, 2007; 1513 posts; 1778 upvotes; BC

Jan 4th, 2020 12:59 pm

goo421 wrote: ↑ Depending on what you spent on, some things may be considered capital and you'd have to claim CCA instead of writing it off as an expense immediately.

Ditto....what did you do to "get it ready" and what is your official business start date? Startup costs that may be claimed..

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