Vehicle related expenses
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Vehicle Related Expenses. You can claim the following vehicle related expenses: gas Oil changes Repairs Toll charges Parking Insurance Tax depreciation (if you own) or lease payments (if you lease). Importance of keeping a log book.

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Vehicle Related Expenses

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Vehicle Related Expenses

  • You can claim the following vehicle related expenses:

    • gas

    • Oil changes

    • Repairs

    • Toll charges

    • Parking

    • Insurance

    • Tax depreciation (if you own) or lease payments (if you lease)


Importance of keeping a log book

  • In order to substantiate your motor vehicle claims, you should keep a detailed logbook to track the business/personal use of the vehicle.


Training Costs Deductibility

  • Training costs are only tax deductible if they are considered non-capital in training

  • Non-capital training refers to training that is taken to maintain, update or upgrade an already existing skill.

  • Capital training is training that results in a lasting benefit to the taxpayer (i.e. Where a new skill is acquired)


Declaring Losses

  • The following is a major redflag and puts you at risk of being audited:

    • Reporting consecutive years of business losses

    • Reporting rental losses from a property because you charged below market rents or you are claiming excessive repair costs


Tax Issue for Non-Resident Investors

  • Tax Account Number

    • Mandatory to obtain a tax account number so the CRA can track your tax filings

  • Withholding Tax

    • Withholding tax applies at a rate of 25% on the rents that you collect in Canada

  • NR6 Form

    • This form reduces the withholding tax


Continued...

  • NR4 Slip

    • This slip reports the gross rents you collected and the total withholding tax you remitted to the CRA.

    • You have to collect this form no later than March 31st of the following year or you will face a penalty

  • Annual Tax Returns

    • Annual tax returns must be filed

    • Section 216 tax return is due by June 30th of the following year


Home office deductions for real estate agents

  • Those who run a home office and use a portion of their home as a designated office space are eligible to claim relevant tax deductions. The primary condition is that the home must be your primary place of business.


Three tier structure for investment properties

  • The Three tier structure is designed for and used by real estate investors. It consists of three corporations:

    1) A management corporation

    2) A Real Estate company

    3) Holding corporation


7. Buying real estate in the US

General Partner:

Classified as a flow through for tax purposes, meaning that only the investors are liable for tax.

Canadian Trust:

Avoidance of estate tax.

Under your own name:

Expenses are tax deductible

Limited liability Corporation:

Double taxation

C Corporation:

Three layers of tax including estate tax and withholding tax.


  • Step 1 – Create a New Corporation – Tax Savings Strategies for Real Estate Agents.

  • Step 2 – Determine Expenses to Charge – Tax Saving Strategies for Real Estate Agents.

  • Step 3 – Charge for Labour Hours – Tax Savings Strategy for Real Estate Agents.

  • Step 4 – Write Monthly Cheques to Management Corporation.

Management corporations for saving tax


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