Question on Tax on income
How would you report your rental income for your tax return? Do you just report the total rent you collected over the year or you report the net income like you would subtract your expenses such as mortgage or maintenance fees from the total rent collected, and then report that net amount as your income on your tax return? The reason I am asking is because in order to rent a property out, you need a business license from the city and this means you are running it like a business. So, if you are running it like a business, then you should be allowed to deduct expenses from your revenue (total rental income). I am just confused, hope you can help clarify this.
Question on Tax on income
Quote:
Originally Posted by
Freestuffrighthere
How would you report your rental income for your tax return? Do you just report the total rent you collected over the year or you report the net income like you would subtract your expenses such as mortgage or maintenance fees from the total rent collected, and then report that net amount as your income on your tax return? The reason I am asking is because in order to rent a property out, you need a business license from the city and this means you are running it like a business. So, if you are running it like a business, then you should be allowed to deduct expenses from your revenue (total rental income). I am just confused, hope you can help clarify this.
We have been self-employed and owners of rental properties - forever.
I do our income tax every year with UFile. The basic package - usually about $20 allows you to create the rental property forms etc - which also brings up the list of allowed deductions. You can claim your business licence cost to insure property, in some cases costs to collect rent, advertising for tenants etc. Strongly recommend that you insist tenants have their own insurance as well and make it a condition of the lease. Costs to generate leases
To avoid capital losses when we sell the property, I always claim ONLY the interest in the mortgage every year when I do taxes. It makes it much neater at sale time - take the sale price - subtract the purchase price then split that amount (hopefully profit) between registered owners - capital gains is based on 50%. (Of course you can deduct costs legal fees, realtor etc)
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