Hello Anon, In Canada there is no way to write off the full costs of your main residence. If you are self employed you can claim a portion of your home as an office you will be able to write off a portion of your home expenses on your taxes. Speak to an Accountant to make sure how much you can claim and if you are eligible. If you have a property that is considered a rental property you can write off 100% of the cost of owning that property against the income you get for rental of that property. We are all hoping that Canada will fall in line with the US regarding the ability to write off your mortgage, property tax etc for your main residence but it is not a law yet. If you or any reader have a question regarding this or any topic please do not hesitate to contact me at any time. Abraham Niyazi - Mortgage Agent - Lic#M08010640 - Centum One FInancial Corp - Lic 10758. Cell: 416-993-4082 Toll Free: 1-866-728-3708 http://www.centum.ca/abraham_niyazi/ I deal with 25 Banks/Lenders and can do mortgages across Canada except Quebec.

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Yes you can use those two as deductions on your taxes. You can also apply your medical expenses if you have enough accumulated on your taxes. H & R block have a great website that you can use as reference for deductions per/state for all tax returns.

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I am in california and i made 52 k and my sister made 50 k. we own a house together that we bought 2 years ago. last year i deducted the house and property tax from my tax return and this year she will be doing it. this year we are comparing the difference in tax return. if she deducts the house from her tax return, she receives over 1k more than me if i deduct the house on my return. why is there such a big difference between her and myself when we compare our returns in terms of deducting the mortgage interest and property tax? also my exemption is 3 and she is at 1. please help explain to me.

I will not speculate on a tax return I cannot see, but you should be splitting it or letting the person who pays it take it on their taxes.

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Hi, question about first time home buyer credit: i'm a california resident for the past 10years. i bought a vacation home in india few years back and deducted the mortgage interest paid on my vacation home on my tax return. the loaning bank from india doesn't provide 1098 forms but i kept the records of interest paid. that said, i bought a primary residence in ca this year in feb10. am i eligible for first time home buyer credit. i read as long as i didn't own a primary residence, i'm eligible but the question is since no 1098 forms were submitted for my previous returns, there is a chance that my previous ownership could be considered a primary residence. am i eligible in this scenario. if so how to communicate in my tax return the details of my previous ownership. thanks

I just love how people make stuff up -- using the wrong head no less. There's NOTHING in the law that implemented the credit that said you were not eligible if you had taken a home mortgage interest deduction. The law says if you didn't both own and live in your principal residence in the past 3 years, you're a first time buyer. While having claimed a mortgage interest deduction *might* trigger some questions by the IRS, it in no way renders you ineligible for the credit. To simplify matters, I'd attach a separate letter to your claim, laying out the deductions that you took in prior years. Attach copies of the loan documents and the deed to the property to substantiate that this is a second home that you did not live in.

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Hi there, i need some help with tax planning that no cpa in california can seem to answer. my wife and i are thinking of purchasing 2 homes, 1 in san francisco, ca and 1 in las vegas, nv. california has a state income tax while nevada does not. i work from home and will declare nevada as my state of residence so as to avoid california's income tax on my earnings. my wife works in san francisco and must continue to pay california income taxes on her earnings. my questions are: 1.) can we file separately for california and nevada and jointly for the us federal government? 2.) since california is a common property state, would they be able to make a claim against my earnings even though i would not earn income in the state? 3.) would we be able to deduct the mortgage interest paid on both homes on our federal return? any replies would be greatly appreciated. we've paid out nearly $20,000 in taxes the last 2 years and really need to minimize our tax base. thanks!

It's my understanding that your federal filing status dictates your state filing status(es) _

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I live in california and have a rental property in illinois. 2008 is the first year i started the rental activity. i had a loss of $20k (including depreciation) but the allowed loss is only about $5k because of my gross income is close to the phase-out limit of $150k. i expect my gross income to decrease in 2009. i have the following questions regarding filing taxes: 1. can i carry over the un-allowed loss to 2009? is there a limit on the number of years carry-over can last? 2. should i still claim depreciation for 2008 even if it doesn't increase the allowed loss? 3. if i don't claim depreciation for 2008, can i claim it for 2009? will the next depreciation be the total of depreciation for 2008 (because i didn't claimed it) plus the depreciation for 2009 or will it just be the amount for 2009? in other words, is depreciation accumulative or use-it-or-lose-it? 4. is it legal to report mortgage interest and property tax for the rental property on schedule a instead of schedule c? because of the phase out limit, i am not able to deduct much from schedule c. 5. when filing 2008 state returns, do i report the rental loss on my illinois return or california return? illinois has lower state income tax rate than california. i have 2008 w-2 income from my previous employer in illinois so i have to file an illinois return although i moved to california on 12/31/2007. 6. for 2009, i will not have any w-2 income from illinois. but i pay property tax to illinois because of the rental property. do i still need to file illinois state return?

1. Yes on the carry forward. No on time limits. If any unused loss remains at sale time, it's added to your basis in calculating your gain for capital gain tax purposes. 2. You must claim depreciation as it is subject to recapture when you sell, whether you claim it or not while you hold the property as a rental. The wording in the Tax Code is "depreciation allowed OR ALLOWABLE" (emphasis mine) so not claiming it will cost you in the long run. 3. See #2 above. Depreciation is claimed in the year that it applies to only. However if your income is low enough in 2009 to recover the full income offset under the passive activity rules you'll pick up the benefit in 2009 for the unallowed amounts from 2008. 4. No, mortgage interest and property taxes for rental properties are ONLY reported on Schedule E. Schedule A is ONLY for your primary residence and a second residence (mortgage interest) and non-commercial property taxes paid. 5. The property is in IL so you report it there. Since you live in CA you also report it there. If you pay any IL tax on the rental income, CA will allow you a credit for the IL taxes paid. Since you are losing money at the moment, this may be irrelevant to your tax situation. 6. Yes, since you have IL source rental income. You have to file an IL return to offset the rental expenses against the IL rental income. As long as you retain approval authority on all tenants and expenditures for major repairs you will meet the active participation rules. I owned rental properties as an absentee landlord for many years and even though I was audited on the rental income and losses a few times, the IRS never questioned the active participation rule. My property management contracts explicitly stated that I had to approve all tenants, mods to leases, repairs in excess of $250, etc. so it was clear that I met the active participation rules.