What options do I have, for tax purposes, for inducement payments I receive on leaseholds?
Allan Madan, CA
There are two options available: first, you can reduce the un-depreciated capital cost (UCC) of the leaseholds by the amount of the inducement. For example, if the leasehold is $50,000, and you received an inducement payment of $10,000, you can choose to include the leaseholds at a UCC of $40,000. On the other hand, you can include the leaseholds at its original UCC, while recording the full inducement amount in income.
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ALLAN MADAN
CA.CPA.CGA
Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.
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