Quote:
Originally Posted by bizaro86
Distributions from REITs aren't typically dividends eligible for the dividend tax credit. Boardwalk REIT came up in the thread. Their tax info is here: http://www.boardwalkreit.com/IncomeTax/BREIT2012T3.pdf
Their distributions are a combination of non taxable return of capital (tax deferral) and fully taxable "other investment income" |
Hi, thanks for the compliments on the blog. The ROC portion (return of capital) is deferred as you mentioned above and as someone else mentioned CCA can't be used to create or increase a loss.
As far as taking CCA goes in 90% of cases I have seen it doesn't make sense to take it.
The recapture of CCA occurs when the property is sold, and the cost of the property for tax purposes (called the undepreciated capital cost – UCC) is less than the sale price of the home. The difference between the original cost and the UCC balance is then taken into income for that year. If the sale price is greater than the original cost, this would result in a capital gain.
The reason CCA doesn't make sense 90% of the time is because of marginal rates, the timing of income and the deductions in the current year.
Hope that helps. If not send me a private message and I can explain further