Thinking about borrowing money by affixing a mortgage to your primary residence to obtain a rental or income investment property

by Doug Cumpson
(Hamilton, Ontario, Canada)

doug@gbtaxaccounting.com www.gbtaxaccounting.com

As may of us are aware . . .

Real Estate Sales truly drive the economy in North America and while there are some differences whether the property is in Canada or the U.S. - in terms of tax treatment and compliance requirements . . . for tax reporting.

Many prospective landlords or buyers are not always aware of all the issues and matters that they will now be required to attend to - on top of the whole landlord - tenant issues.

You tax specialist should be asking you for the following when it comes time to complete your taxes whether they be for a Canadian piece of Property you are investing in or a U.S. Vacation or income property(ies) that you may be looking to acquire;

The following is a checklist of items that need to be reviewed - ideally even before you jump into the acquisition or purchase of an income or vacation property. But if you already have made that purchase the following is still a good review or checklist to follow;

Real Estate Rental Checklist

Complete a form for each Rental Income Property.

All Information provided should be supported by receipts – you are required to retain these receipts for a period of six (6) years in case the CRA wants to review or audit these receipts and/or expenses.

Rental Property Details:
Income Property Address: _____________________________________________ Postal Code ____________
Number of Units: ____ Single 100% Owner (Y/N) or Partnership (Y/N) _____%
Owner’s Names: _______________________________________________
_______________________________________________
Personal Use (Y/N) if Yes what percentage __% or Sq Ft Used _____of Total ____
Rent Revenue: $
Non-Refundable deposits from tenants being held onto $
Any other income (parking/laundry/bank interest) $

Expenses:

Accounting and/or Legal Fees $
Advertising: $
Alarm & Security systems $
Appraisal Fees (for financing or buy/sell activity): $
Bank fees: $
Garbage Disposal $
Hot Water Tax Rental: $
Internet costs: $
Inspection an Engineering Fees: $
Land Transfer Tax (for purchases): $
Property Insurance: $
Bank or Mortgage Interest: $
Property Management Fees: $
Motor Vehicles Expenses:$
Repairs and Maintenance:
Sub-Contractors $
Landscape/Snow Removal/Lawn-Care $
Appliance Repairs $
Building Repairs/Misc. Repairs $

Refinancing Costs of fees:
Salaries and Wages on Payroll including owners $
Superintendent Fees: $
Telecommunications costs related to the owner: $
Travel Costs (lodging, cab fares, planes, bus etc.) $
Utility Costs (Natural, Gas. Electricity, Water. Sewer) = $