Author Topic: 14 Day Rental rule - in Canada?  (Read 1848 times)

Goldielocks

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14 Day Rental rule - in Canada?
« on: October 15, 2019, 11:23:57 AM »
Hi all...
I recall seeing an article that stated that accountants that claim they can save you thousands on your return (small business), are usually just pulling the "14 day rental rule" where you can rent your home for up to 14 days without declaring the income.... so your small business can hold their AGM / Board meetings at your home, and you can claim a business expense for FMV of that meeting room, and don't need to claim the income on the home owner side.

That's for the USA, though.   My memory from the article is that you can do the same in Canada... but all the google searches indicate that although it can be a valid small business claim, you need to declare your income on your personal return for ANY rent received for renting rooms / suites in you your home.

Two Questions:
1)  Do you always need to declare income on renting rooms in Canada?   No matter how small / few of days?
2)  If so, is there any way to make this work in Canada - e.g. if you have a spouse that is under the personal exemption limit for income ?   Could it be easy to find offsetting expenses that negate small incomes?  How?

Thoughts?

Missy B

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Re: 14 Day Rental rule - in Canada?
« Reply #1 on: October 22, 2019, 10:08:38 PM »
Hi all...
I recall seeing an article that stated that accountants that claim they can save you thousands on your return (small business), are usually just pulling the "14 day rental rule" where you can rent your home for up to 14 days without declaring the income.... so your small business can hold their AGM / Board meetings at your home, and you can claim a business expense for FMV of that meeting room, and don't need to claim the income on the home owner side.

That's for the USA, though.   My memory from the article is that you can do the same in Canada... but all the google searches indicate that although it can be a valid small business claim, you need to declare your income on your personal return for ANY rent received for renting rooms / suites in you your home.

Two Questions:
1)  Do you always need to declare income on renting rooms in Canada?   No matter how small / few of days?
2)  If so, is there any way to make this work in Canada - e.g. if you have a spouse that is under the personal exemption limit for income ?   Could it be easy to find offsetting expenses that negate small incomes?  How?

Thoughts?


1) Yes, always.
2) I'm single so not experienced with married returns, but I'm pretty sure that as long as one of you declares the income you're fine. If the relative portion of the house you're renting is small, you could rent it all the time without triggering other capital gains issues. The % of electricity or heat, cleaning supplies, even internet could be applied. Small improvements like paint. Perhaps if you had a child you could pay them to deliver flyers for advertising. 50% of your meal costs, for legitimate networking/meeting for promotion/business. Not dinner with your spouse, unless other people are there.

Goldielocks

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Re: 14 Day Rental rule - in Canada?
« Reply #2 on: October 23, 2019, 05:08:22 PM »
Thanks, that's what I thought, too.    The article I recalled was about some tax accountants being too aggressive to try to win your business, by saying they will save your thousands... and that when you ask, the "14 day rule" was one of the main items they pitch t... of course, if they are applying a US rule to Canada returns, you definitely don't want that accountant.