Tax Question

[MikeMcC874]

Hi All,



I expanded my vast empire to 2 properties back in June. Now i need to figure out how to sort my taxes.



I get that expenses for property A are allocated towards property A and so on and that I file a seperate form for each property. What I am unsure of is items that are not directed expenses. Say I buy a book or a lawn mower that is used for 'both properties'.



How is the allocated?



Even split?

Revenue Ratio?

My choice?



Thanks

Mike

 

[Thomas Beyer]

Congratulations. Going from one to 2 properties is100% growth. Assuming you hold income properties personally ( and not in a corporation ) you add general business expenses on your personal tax return in the main section, not in the property form ( one form per property). For expenses that are solely for properties split them 50/50 or 60/40 on each form or whatever is actual and reasonable. A lawn mower may be a capital item and thus only depreciated over its useful life, say 4 years.

 

[MikeMcC874]

Thanks Thomas.



So I can apply those expenses against my earned income from regular employment and still use CCA to bring my RE earnings to zero on each property?



Thanks

Mike

 

[Thomas Beyer]

For expenses that are solely for properties split them 50/50 or 60/40 on each form or whatever is actual and reasonable. A lawn mower may be a capital item and thus only depreciated over its useful life, say 4 years.