Tag Archive for property tax

Canada Tax: Capitalization Of Development Cost Under The Income Tax Act

During the development phase or period of construction, there are many costs that are incurred. The majority of these expenditures are added to the capital cost of property or to the cost of inventory.

Soft costs do not have to be capitalized once the construction is complete or on the day that the building is substantially (at least 90%) used for its intended purpose. An occupancy certificate or completion certificate issued by the municipal building department is sufficient evidence that construction is complete. Read More

Written by | Posted in Canada • International • Real Estate

Real Estate Expenses After Acquisition Of Property For Tax Purposes

After a property is purchased, there is generally a time period that a property is held before it is developed. Common expenses that are incurred are property taxes and interest. Other expenses incurred can be classified as an operating expense, added to inventory cost or capitalized for tax purposes.

Property taxes and interest on vacant land are generally capitalized or added to the cost of inventory for real estate. These expenses on vacant land can only be deducted in the same tax year if there is property income received and the corporation is not in the business of development. Read More

Written by | Posted in Canada • International • Property Tax • Real Estate

Using Online Agents to Rent Your Home Short Term? You May Be Surprised at the Tax Ramifications

If you are among the many taxpayers renting your first or second home using rental agents or online rental services that match property owners with prospective renters, such as Airbnb, VRBO and HomeAway, then you should know the IRS has special rules related to short-term rentals.

When property is rented for short periods, special (and sometimes complex) taxation rules come into play, which can make the rents excludable from taxation; other situations may force the rental income and expenses to be reported on Schedule C (as opposed to Schedule E). Read More

Written by | Posted in Rental Property Tax • TaxConnections

Canadian Tax FAQ – Prepaids on a Balance Sheet

Grant Gilmour

What are Prepaids on a Balance Sheet? The Prepaids category appears under Current Assets on a Balance Sheet. Prepaids represent expenses that are paid in advance for a future period.

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Written by | Posted in Accounting Methods • Canada • International

Personal Property Tax Issues

There is an interesting article in the San Jose Mercury News – “Silicon Valley’s stealthy, selfish war on taxes,” by Michelle Quinn (9/11/15).  She looks at some of the assessed values high tech firms have noted for their equipment, including $1.  She reports that some companies argue that the machine has no value to anyone else.  That seems odd.  But, it is a problem with a valuation tax, such as the property tax.

What is business personal property, such as equipment, worth each year?  Arguably, when purchased, it is worth what you paid for it, but it isn’t worth that much after that.  The valuation approach used does allow for adjustments down for subsequent years. The system also allows for lower values and appeals when necessary. Read More

Written by | Posted in Property Tax
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