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Originally Posted by Red
I still don't see how you showed that. If he has a 3K income after all expenses then he still needs to pay tax on it. No?
And the capital gains point was already established. I was merely pointing out that he shouldn't just move out and rent out the place as there may be tax consequences.
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Check out my example post where I stated this:
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Take amortization equal to earnings of $3,000 to reduce rental income to nil. (Side note: you cannot create a loss by taking more amortization than your earnings figure.)
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Earnings less amortization (CCA) = rental income
3,000 - 3,000 = 0
You then have zero rental income, which goes to your T1, and thus you do not pay any taxes on it, because your rental income is zero.