Real Estate Tax Archives

If I have a rental property in the U.S., what do I need to attach with my US tax returns to ensure the IRS accepts the figures reported?

When submitting your tax return to the IRS, you must ensure that all figures that you claim as an expense have the proper documentation submitted with them. Additionally the receipts and invoices you submit along with your tax return must prove: The expense is reasonably considered to be an ordinary expense given the nature of … Continue reading

I just sold a rental property that was held within a corporation. What are the tax implications?

When rental property is held within a corporation, the capital gains rules are slightly different. Similar to an individual holding a property, only 50% of the capital gain is taxable. The taxable portion of the capital gain is taxed at a corporate tax rate of approximately 46%. When dividends are paid by the corporation to … Continue reading

Which US states allow the formation of LLLPs for US real estate investments?

Question: I’m a Canadian citizen and resident. My Canadian accountant told me to purchase US real estate through an LLP or LLLP. Which states allow for LLPs vs LLLPs to be setup? Answer: Unlike LLPs which can be formed in any state, only certain states offer the option for the creation of an LLLP. These … Continue reading

What’s the difference between an LLP and LLLP with respect to US real estate purchases?

Question: I live in Canada and I’m a US real estate investor. I want to set up a limited partnership in the US for real estate I own but I have no idea what the difference between an LLP and an LLLP is. Answer: In an LLP (limited liability partnership), the partners assume the management … Continue reading

What do the terms recapture of Capital Cost Allowance (CCA) and Terminal Loss mean?

Question: My company sold capital assets (including a building, furniture and equipment). I see the terms “Recapture” and “Terminal Loss” on my corporate tax return, what do these mean? Answer: When you purchase capital assets (e.g. vehicles, buildings, furniture, computers, equipment), the Canada Revenue Agency (CRA) applies specific depreciation (CCA) rates. The rates are a … Continue reading

Can I write-off leasehold improvements?

Question: I recently moved into a new building and was required to cover the cost of making the new space suitable for my purposes. This included purchasing new lighting, installing new flooring, internal walls and wall coverings. Is it possible to write off these expenses from my business? Answer: According the the Income Tax Act, … Continue reading