I am selling a property (duplex) on the West Coast. This specific property has been in my name 2 years. I will be looking at a $100,000 capital gain. As a tenant has just moved out, it has been repainted $3200, and I am thinking of doing the back half of the roof for $7,000. This specific unit will be kept empty until sold, to allow easy access for prospect buyers. The other units rental income is low, as tenant has been in there 12 years, thus duplex will not have positive cash flow this year.

How do these capital cost get claimed, when the work is done, in the same year, as it is sold?

Thanks beforehand

Any of the expenses occurred should be counted, so I don't know really what is your question.

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A Proud Indian Canadian

The question is does it get claimed as a capital cost or, Line 8960 – Repairs and maintenance?




A Proud Western Canadian

I understand it now. Apologies. I am not expert, so let's wait for someone else who know this to comment on this. Thanks.

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A Proud Indian Canadian

Hello:

I am not an accountant but would share my 2 cents.
The tax will be calculated for the year it is sold. The repainting and roof will be applied to repairs and maintainence account since that is what it is. Only expenses that go to Capital cost will be those that are done to increase the 'value' of the asset - like upgrades to the washrooms/kitchens (upgraded counters, fixtures, redesigns etc) or landscaping changes (replacing lawn with interlock etc.).

Being in the landlord business, I am sure you do have a qualified accountant to help you with your tax filings. He/she may have more valuable advice.

Goodluck.

Hiren