06-16-2015, 12:50 PM
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#21
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First Line Centre
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Unless you are running it as a business, generally speaking, splitting rent with a spouse or subletting it to unrealted people, won't be considered income or revenue for tax purposes.
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06-16-2015, 01:25 PM
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#22
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In the Sin Bin
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Well then perfect. I'm not too worried about her. I have no intentions of breaking up with her and I doubt she'd ever do anything like that but better safe than sorry.
Just remembered another good motivation for this move... Getting out ahead of a potential PST. That's 15 grand right there.
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06-16-2015, 01:48 PM
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#23
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Franchise Player
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Quote:
Originally Posted by darklord700
Unless you are running it as a business, generally speaking, splitting rent with a spouse or subletting it to unrealted people, won't be considered income or revenue for tax purposes.
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Source? Spouse yes, but I recall reading something that relatives aren't exempt.
Also, if you're considering her a spouse or equivalent, that negates the entire point, in which she would be common law after a year, and entitled to half his stuff, which takes us back to the contract/pre-nup he was talking about.
Last edited by DownhillGoat; 06-16-2015 at 02:24 PM.
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06-17-2015, 12:09 PM
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#24
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#1 Goaltender
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Worded incorrectly. I was trying to refer to cost sharing vs rental income. If you are going below fair market you have no intentions of turning a profit there for you are cost sharing. So just rent the room for under FMV and you are fine she isn't entitled to your property and you don't need to claim anything.
"Renting below fair market value You can deduct your expenses only if you incur them to earn income. In certain cases, you may ask your son or daughter, or another relative living with you, to pay a small amount for the upkeep of your house or to cover the cost of groceries. You do not report this amount in your income, and you cannot claim rental expenses. This is, in fact, a cost-sharing arrangement, so you cannot claim a rental loss. If you lose money because you are renting a property to a relative for a lower rate than you would rent it to other tenants, you cannot claim a rental loss. When your rental expenses are consistently more than your rental income, you may not be allowed to claim a rental loss because your rental operation is not considered to be a source of income. However, you can claim a rental loss if you are renting the property to a relative for the same rate as you would charge other tenants and you reasonably expect to make a profit. "
http://www.cra-arc.gc.ca/E/pub/tg/t4036/t4036-12e.pdf
Last edited by fundmark19; 06-17-2015 at 01:44 PM.
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06-17-2015, 01:14 PM
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#25
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Franchise Player
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Attainable Homes
Nm, you edited.
But I still wouldn't go with that in this instance. The reason for the "rental" scenario is to avoid being common law/essentially a pre-nup. In your example it's limited to family members, etc. kind of tough to have it both ways.
I wouldn't want to tell revenue Canada that you're "renting" her part of the place to avoid being common law, but you're avoiding claiming it as rent too.
Either way out of scope. Off to PM.
Last edited by DownhillGoat; 06-17-2015 at 01:55 PM.
Reason: because fundmark
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06-24-2015, 10:11 AM
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#26
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In the Sin Bin
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Signing date coming up and I'm starting to get cold feet.
Damn you oil.
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06-24-2015, 11:17 AM
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#27
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Playboy Mansion Poolboy
Join Date: Apr 2004
Location: Close enough to make a beer run during a TV timeout
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Here's something to consider- is it possible you were able to get through this program because of the current housing uncertainty? Meaning that if you wait for the market to start going back up, will you be approved again? And might you not be considered a second time because you pulled the plug once before?
You may not make as much as you would if you hit the market just right, but you are also being given 5% right off the bat- which should cover any corrections. And in 3-4 years I don't see houses being lower than they are today.
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The Following User Says Thank You to ken0042 For This Useful Post:
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06-30-2015, 10:26 AM
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#28
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Farm Team Player
Join Date: Mar 2012
Exp:
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Bit of a bump here. Common law relationship do NOT have the same dower rights to property that full marriage provides. If polak and his girlfriend break up, she is not entitled to half the house or even half of his stuff. Likewise, he is not entitled to half of her stuff either. She could potentially try to sue for other things (alimony) or if there were renovations/upgrades put into the house that she helped with.
TLDR: polak doesn't need a prenup or any sort of agreement regarding the house if he is the one buying it and will be the only one on title.
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06-30-2015, 10:36 AM
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#29
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RealtorŪ
Join Date: Feb 2009
Location: Calgary
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Quote:
Originally Posted by codfather
Bit of a bump here. Common law relationship do NOT have the same dower rights to property that full marriage provides. If polak and his girlfriend break up, she is not entitled to half the house or even half of his stuff. Likewise, he is not entitled to half of her stuff either. She could potentially try to sue for other things (alimony) or if there were renovations/upgrades put into the house that she helped with.
TLDR: polak doesn't need a prenup or any sort of agreement regarding the house if he is the one buying it and will be the only one on title.
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What is the purpose of a cohabitation agreement then?
What does one who has been dating and living together for 6+ months have to worry about?
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06-30-2015, 11:33 AM
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#30
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Farm Team Player
Join Date: Mar 2012
Exp:
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Cohabitation agreements provide the same rights to insurance and company health care benefits and filing taxes together. I'm sure there's probably more to it than just these, but these were the main points that I remember.
Unless things have changed, on break up, the only assets that would be split would be those that were aquired and owned by both parties during the time of the cohabitation.
I was in a similar situation years ago and read several court cases to see what my rights were. The only cases where right to the housing asset was awarded (and not a full 50/50 split as I recall) was in situations where there was proof that the party that didn't own the house had put in significant money or time towards renovations and improvements.
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