Personal Tax Handbook - Rental Income

This is the second module of the Personal Tax Handbook, covering rental income and deductions. This is the first of two modules examining the state of taxation in real estate in Canada by looking at the rental income side of reporting. Module 3 in this series covers the other area of increased scrutiny by the CRA, principal residences. Each course takes an in-depth deep dive into the most frequently encountered situations and frequently asked questions in personal tax preparation. The course methodology follows a two-stage teaching approach meant to give practitioners the tools required to file tax returns and advise clients on critical tax reporting and compliance matters. These two stages are:

1. Preparation Tips, Tricks & Traps – Best practices, overviews, and methodologies on reporting and completing the tax return covering areas that are often overlooked or misunderstood by many practitioners.
2. Tax Advisory & Problem Solving – How to deal with common and tricky situations that do not have easy answers or solutions. CRA guidelines and a number of court cases are analyzed and presented to help you formulate a filing position that can be defended at the highest level on any tax return you prepare.

This seminar will cover a number of topics, including the following:

• Proper reporting of rental income and deductions on the T776 Statement of Real Estate Rentals, including reviews on how to complete statements for taxpayers renting out a portion of their principal residence and making a personal vacation property available for rent when not being used.
• Overview and reporting for recapture and terminal loss on rental properties, including a discussion on tax implications of claiming CCA on properties and the discussion to have with clients regarding CCA.
• A detailed look at deductible expenses and areas to practice caution, including vehicle, travel, and home-office expenses in the context of rental income.
• Understanding the challenges and audit issues a taxpayer may encounter when renting out properties or a portion of their home to family members or individuals with whom the taxpayer does not deal at arm's length.
• Understanding the importance of running a rental property in a commercial manner and the threat of having CRA disallow rental losses.
• A methodology and process that you can apply to client files to determine whether an expense can be deducted as a current expense or whether it has to be capitalized and depreciated (CCA).
• Numerous court cases are examined that you can use as part of your toolbox to take on the CRA in any client tax disputes dealing with rental income.

Also provided is a unit on practicing safe rental income tax for your practice. Here, we will apply all the concepts outlined in this course to provide you with a number of best practices and practical approaches that you can implement in your practice today to deal with both clients and the Canada Revenue Agency. Given the increasing complexity of tax legislation in Canada, coupled with the aggressive nature of CRA auditors, it is extremely important that we formalize procedures and best practices in our businesses to deal with these situations and protect ourselves by lowering tax practice risk.

This seminar is updated frequently with changes in legislation, CRA documents and guidelines, and relevant court cases. This seminar series is developed with the tax practitioner in mind and will be a valuable resource in your personal tax preparation practice. With the growing complexity in the Canadian tax landscape, it is more important than ever to understand how the CRA is assessing and applying existing tax laws. Join us for this in-depth seminar and master the area of rental income and deductions when preparing T1 tax returns for your clients.