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

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

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 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

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 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

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

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

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

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.


Management corporations for saving 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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