Rental Condo acquired at the end of the 2021 but tenanted in Feb 2022

Cherya wrote: ↑ Hi guys,

Just a quick question on the situation when a pre-sale condo has acquired in 2021 with certain expenses paid e.g. legal fees, advertisement, appraisal etc. however it was completed and we tenanted it in February 2022. So it started generating income only in 2022. What would be the process to write off those expenses occurred in 2021? Should they be expended next year?

Thanks!

Numbersman1941 wrote: ↑ You are unable to write off those expenses. They are added to the cost of the property.

Cherya wrote: ↑ Just to clarify, The appraisal fee was for another property HLOC used to fund the pre-sale condo. Also how about the HLOC interest - paid to fund the presale purchase (no mortgage).

Advertising
You can deduct expenses for advertising, including advertising in Canadian newspapers and on Canadian television and radio stations. You can also include any amount you paid as a finder's fee.
???

Agree with the legal fee. You can't.

Boy how about the
-Interest
-Advertising

Move those to 2022 tax year and write off?

Numbersman1941 wrote: ↑ You are unable to write off those expenses. They are added to the cost of the property.

Numbersman1941 wrote: ↑ I was too hasty in my response - advertising deductible; appraisal for loan likely deductible as borrowing cost.

Cherya wrote: ↑ Thanks, but the main question should they be deducted for 2021 tax year (when they have occurred) or since the unit was rented in February 2022 and income to be reported for 2022 only, should those few expenses occurred at the end of 2021 be transferred to the 2022 tax year?

Cherya wrote: ↑ Thanks, but the main question should they be deducted for 2021 tax year (when they have occurred) or since the unit was rented in February 2022 and income to be reported for 2022 only, should those few expenses occurred at the end of 2021 be transferred to the 2022 tax year?

kangarooz wrote: ↑ I am pretty sure if you received those costs in 2021, you should book them for the 2021 year, an accountant can correct me though.