Posted on: 05-12-13 17:21:33
Hi Guys,
We bought brand new property before two years and property assessment not completed yet. So, we just paid only partial property tax (only on land amount) up to today. This is our rental property.
For last two years, we claim in income tax only what we paid.
I believe outstanding balance will be more or equal to $5K (by December 2013) once assessment will be completed. Now, I am thinking to pay $5K for property tax before December 2013. So, I can claim $5K in 2013 tax.
Do you think this is right? (Paying tax without proper bill. City has confirmed that they can accept the payment but I am not sure I can claim $5K to CRA or not)
I appreciate your response.
Thanks in Advance
-----------------------------------------------------------------
Success is Never Ending and Failure is Never Final.
Quote:
Originally posted by meitsme
Hi Guys,
We bought brand new property before two years and property assessment not completed yet. So, we just paid only partial property tax (only on land amount) up to today. This is our rental property.
For last two years, we claim in income tax only what we paid.
I believe outstanding balance will be more or equal to $5K (by December 2013) once assessment will be completed. Now, I am thinking to pay $5K for property tax before December 2013. So, I can claim $5K in 2013 tax.
Do you think this is right? (Paying tax without proper bill. City has confirmed that they can accept the payment but I am not sure I can claim $5K to CRA or not)
I appreciate your response.
Thanks in Advance
---------
You have been folowing the standard practice of pay only the demanded amount. Carry on doing the same.
The city cannot go back and say that they want back taxes next year. They will have to project the same and give you an advance notice of assessment prior to sending you the demand notice. If the figure you are quoting, a sum of $5,000 has been projected , but NO demand has been made prior to 31st of December 2013, you just stay put and follow the standard practice. Which is pay only what they ask. So, this year you are in plus side in the taxes.
Whenever they make a demand and if in that notice, they say part of it is for the previous year, you can always re-open the last years Income Tax return and send in an amendment to that submission and make the adjustments. All of these are accounting practices and since you will be benefitting immensely with the amendment, use the Block or any tax people to help you with your tax return if you are not comfortable doing the same. Cost abour $30.
With all the profit that you are making and the prices of homes peaking, do you think it is a good time to sell it and invest the gains in a 16% Fixed deposit and enjoy worry free income? Some one may jump at a very good investment like the one you have.
Just my two bits.
FH.
Thanks FH.
If there is nothing wrong to pay $5K property tax to City (before receiving the bill) and claim expense in income tax of 2013, I would prefer to pay now. I don't want to carry forward this amount to next year and I don't want to make any change in previous year tax returns.
By the way which investment gives you 16% interest.
I am looking for source which can give me 6 to 8% interest.
Thanks
-----------------------------------------------------------------
Success is Never Ending and Failure is Never Final.
Check this link and the postings there. Get back to me after that. Currently it was good till 30th November 2013. Hope they have extended the same.
http://canadiandesi.com/read.php?TID=34583&page=1#207429
You will be paying taxes here in Canada. But it will be free in India.
FH
Hello,
With regards to claiming property taxes on your Income Tax Return, you will be able to do that on the T776 Statement of Real Estate Rentals. If your property taxes and other rental expenses as a whole are greater than your rental income, then you will have a rental loss, (i.e. a non-capital loss), which you can use in the current year, carryforward for the next 20 years, or carryback for the previous 3 years. A non-capital loss can be used to reduce any other type of income you may have, such as employment, investment, and other income (RRSP, etc).
Hope that helps in some way.
-----------------------------------------------------------------
Madan Chartered Accountant team
http://www.madanca.com" rel="nofollow">LINK
