Canadian Rental Income Taxes

[Jonah T.]

I am trying to determine the best path forward for how to deal with rental income (yes I'm late!) and major renovations. It is clear to me it is best to expense it in the year it was spent, but unclear what the CRA will allow as a maintenance expense versus a capital expense. I do not have a company, just running as a sole proprietorship for the time being.

I purchased a property in November 2019 and in 2020 replaced windows, doors, some lights, soffit, kitchen floor, tub, added insulation, heat pumps etc. It is a 2 unit. I put this on an unsecured LOC.

1. As i didnt change the structure of the house can I claim these as maintenance expenses?

2. Can i claim the interest on the LOC as an expense?

3. Can i spread the overall negative income or have to take it all in the 2020 year (not looking at CCA)?

4. I didnt have any rental income for 2019 but also didnt claim expenses. Will the CRA consider the property having a deemed disposition that I started renting it in January 2020? Should i redo my 2019 taxes to include expenses?

A recent article is confusing me even more haha.

https://financialpost.com/personal-finance/taxes/difference-between-current-and-capital-expenses-has-big-tax-consequences-for-rental-property-owners

[Account Closed]

@Jonah T.

Bank accounts: one per property.

Credit cards: two. One for write offs one for everything else. NEVER mix. Everything goes on these cards then gets paid from property accounts or personal if it’s the personal card.

LOC's: never mix business and personal expenses here either. Ever.

Doing it this way your book keeping is essentially your bank statements