By Gigi Suhanic
National Post
FP Money
Saturday, April 17, 2004
Question: I neglected to file my capital losses for 2002. Can I still carry the capital losses over from 2002 into my 2003 tax filing? What can/should I do to recover the capital loss claims from previous years if I failed to file the capital losses in those years?
Adrian Mastracci, financial advisor with
Vancouver based ‘fee-only’ KCM Wealth Management, says, “You can carry capital losses back up to three years or forward until you use them up.”
Answer: You can carry capital losses back up to three years or forward until you use them up. First, says Adrian Mastracci, a financial advisor with KCM Wealth Management in Vancouver, file an adjustment for 2002 with the Canada Revenue Agency and report the losses. They will be applied to the gains in 2002. After that the losses can be carried back to 1999, 2000 and 2001. In those years gains were taxed at a higher rate than they are now. After doing that, any remaining losses can be carried forward to 2003.
Question: My brothers and I rent out four properties and I handle the office duties (paying bills, filing taxes). I have an office in one bedroom in my house that I use about 10 hours a week for these purposes. I know I can claim small expenses like stamps and paper against my rental income, but can I write off a portion of my house expenses or does this not qualify as a home office?
Answer: According to Ryan Beebe, office incidentals are all you're entitled to as deductions because you're earning the income from property, not a business. "That distinction would eliminate the possibility of deducting at-home office expense other than the supplies, etc.," Mr. Beebe says. However, if people are running a business out of their home, they can deduct a percentage of a gamut of expenses if that is their principal place of business or if they use the space to earn income "on a regular and continuous basis." Other deductions would include heat, light, mortgage interest, property tax, insurance. The sum that can be deducted "needs to be prorated for the amount of space the office occupies in relation to the total square footage of the house and the number of hours that the space was used for office purposes," says Mr. Beebe. However, Mr. Beebe says that people who claim these types of expenses and don't have a separate room, instead doing their work in a corner in the basement, could wind up in trouble. "Administratively, the Canada Revenue Agency will let that through but if it was ever challenged, most likely they wouldn't have a leg to stand on," Mr. Beebe says.
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