Rental Related Expenses on T776 or T2125?

by Erik
(Toronto)

I have a rental property in the US and Canada. I am not incorporated.

I drive around to look at possible purchases, where do I expense those trips?

In my T776 or in a T2125?

All of the income from the properties is in the T776 so the T2125 would be shown as a loss.


PS Great site. I learned that I couldn't expense my home office without prorating hours :(

Erik, great question .. and it is a gray area.

As you have figured out, there is an important distinction between rental income and business income. See what taxtips.ca has to say on this matter:

http://www.taxtips.ca/realestate/rentalorbusiness.htm

It's hard to find definitive guidance on this issue. There was a bit of a discussion on this in these forums:

http://www.asktaxguru.com/712-travel-expenses-for-real-property-purchase.html

https://www.askmehelpdesk.com/advice/t-615431.html

They are U.S. sites but I believe these arguments could apply in Canada as well.

Sorry I can't be more help. Maybe some of my other site visitors with rental property experience will know the answer to your question.

Best bet is to visit your accountant for advice.