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Thread: Accountants.......please help!

  1. #1

    Accountants.......please help!

    I have a tennant that is driving me crazy, I understand that if i kick them out and keep the place empty I could raise the rents to market level and not respect the previous rent levels. (they are paying $410 per month for a 5 1/2).
    Here is my question, if I keep the appartment empty for 12 months, can I deduct the loss of rent from my taxes?

  2. #2
    What part of the town ? I might be interested in this place... I will pay more than $410/month

  3. #3
    Join Date
    May 2005

    Mettre un locataire a la porte

    Bonjour J. Peterman ,

    J'ai été dans une situation semblable il y a quelques années lorce que j'ai repris un logement pour un membre de ma famille immédiate . Un avis a été envoyé 6 mois avant la date de reprise du logement et le locataire a refusé en envoyant un avis de renouvellement de bail . Donc j'ai du aller a la régie du logement ou j'ai presenter le dossier devant un juge . M'a demande a été accepté m'ai j'ai du assumer les frais de déménagement de mes locataires qui était de 1500$ .

    La loi de la regie dit que ''le propriétaire peut reprendre un logement pour Pour lui-même. ,Pour son père, sa mère, son fils ou sa fille ,Pour tout autre parent ou allié 3 dont il est le principal soutien ,Pour son conjoint dont il demeure le principal soutien après la séparation de corps (par jugement), le divorce ou la dissolution de l'union civile'' .

    Au lieu de ne pas louer ton logement je le louerais a un member de ta famille (au meme tarif 410$ avec un bail beaucoup plus élevé etant donné que tu aura rénove pour 50009 % donne une augmentaition de 195donc maintenant tu est a 800$ et quane ton membre de famille quittera tu ira chercher un autre 0.8%)


  4. #4
    Hi Peterman

    You cannot declare a loss from revenues not earned, on an empty apartment, losses can only occur if your expenses are greater than your revenues.

    So if throughout the year you only rented for 6 months at let's say $500 per month, then your revenues are $3000 les expenses such as insurance, mortgage interest repairs, etc. You can't deduct an extra
    $3000 for the loss of 6 months rent.

    oops, Maxima gave you a good example , sorry for repeating.
    Last edited by voyager9; 06-06-2005 at 11:06 PM. Reason: revision

  5. #5
    Registered User
    Join Date
    Aug 2004
    In the states, if the place is available for rent and you actively attempt to rent it ( through advertising, managment company etc.) you can deduct a loss generated without any rental income. That is subject to certain income level phase-outs for higher income individuals.

    Of course if this is in Canada then I don't know what the f*ck I am talking about.

  6. #6
    Join Date
    Feb 2005
    Near By
    Hi J.P.

    For the second part of your question, Maxima and Voyager9 were right.

    As for the first part of your question, to be able to kick out your tenants, you will have to present a case in front of ''La Régie du Logement'' to obtain a cancellation of the lease. If the judgement is in your favour, go a head, kick them out of there but to be able to get that judgement, you better have a dam good reason. You better verify with them how to proceed before doing anything. Unless you drive your tenants completly creazy and they wrote you a lettre telling you that they won't renew their lease at the end of the contract and they will leaving the appt. on such date but, I wont recommand you to do that because they can do a lot of dammages to your appt and it will cost you more to try to get a hold on them after.

    If you obtain that judgement, you can always do some renovations to the appt and then, you will be able to increase the monthly rent because, if a potential tenant bring the fact that you have increase the rent higher than the % allowed, you can always claim that it is not the same appt as it was before. La Régie will ask you to present all your invoices to proof that you have actually made those renovations and it's better not be that you have only change a carpet.

    As for the expenses, you will have 2 way to claim them to the gvmt.
    1st, as Maxima describe it, 0 revenus less x$ of expenses x 50% = y$ loss x your income tax rate and you declare the lost at the end of the year.

    2nd,(depending of your financial situation) you don't claim the expenses for the renovations but you increase the cost of the building by that amount. When you will sell the building, you will pay less capital gain that you will do. As exemple, let say you have bought the building in 2000 for 100,000$ and you sell it in 2010 for 200,000$ for a total gain of 100,000$. Now, if you are doing renovations for, let say 20k and not claiming that expense on your income tax report, you will increase the cost of the building to 120,000 so it will bring down the capital gain to 80k. When you will do your income tax report at that period, you will say :
    80k capital gain x 50% because you were living in 1 apt of the duplex (I presume it's a duplex) = 40k x 50% because half of the capital gain is taxable= 20k taxable at your income tax rate at the time.

    I hope I was able to help you out.


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