Rental properties

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If you owned a rental property in 2015, any net income or loss must be reported on your 2015 income tax return. Rental income is usually reported on a calendar-year basis. Any income or loss from a rental property you own outside of Canada must also be included in your return.

Tips for Maximizing Repair Deductions (Tax)

As far as taxes go, repairs to rental property are always better than improvements. Why? The entire cost of a repair is deductible in a single year, while the cost of an improvement to rental property may have to be depreciated over as much as 27.5 years.

How do you tell the difference between a repair and an improvement? Here’s the basic rule from the IRS: An expense is for an improvement if it:

• makes a long-term asset much better then it was before
• restores it to operating condition, or
• adapts it to a new use.

In contrast, expenses you incur that don't result in a betterment, restoration, or adaptation are currently deductible repairs.

Here are some tips to help you ensure that an expense will constitute a repair, not an improvement.