How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Lane Your Own Question
Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 10122
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
1929974
Type Your Finance Question Here...
Lane is online now
A new question is answered every 9 seconds

I live in Canada and need to know. I am starting up a

Customer Question

I live in Canada and need to know. I am starting up a business (lets say a campsite) but our primary residence would be on site and be used for a lot of our business - iw classes etc. We will not have a mortgage to deduct the interest so is there a way I can deduct some of the home-building expenses
Submitted: 5 months ago.
Category: Finance
Expert:  Lane replied 5 months ago.

Hi,

...

I'm so sorry, but typically anything that is building, or improving real property is capitalized (adds to your basis so that the gain on sale some day may be less) but isn't deducted in the crurrent year, the way interest, repairs and maintenance, etc. can be deducted.

...

See this from CRA:

...

A current expense is one that generally reoccurs after a short period. For example, the cost of painting the exterior of a wooden property is a current expense.

A capital expense generally gives a lasting benefit or advantage. For example, the cost of putting vinyl siding on the exterior walls of a wooden property is a capital expense.

Expert:  Lane replied 5 months ago.

Here's an excellent table for making the decison whether to expense or capitalize:

...

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/rntl/crcp-eng.html

...

The primary questions are as follows:

...

Does the expense provide a lasting benefit., Does the expense maintain or improve the property, Is the expense for a part of the property or for a separate asset?

...

Expert:  Lane replied 5 months ago.

Please let me know if you have any questions at all.

...

If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the faces or stars on your screen, and then clicking “submit")

JustAnswer will not credit me for the work unless you do.

...

Thank you!

Lane

I have a law degree, (Juris Doctorate), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, on three continents, since 1986.

Related Finance Questions