Claiming Renovations

[bright sparks]

My accountant's majority of clients are home daycare providers. They travel around the golden horseshoe doing workshops that are catered towards home daycare providers that have different rules than other sole proprietors.

We can not claim any expense that adds value to our home even if it is solely for daycare use. It becomes a question of capital at that point and as we are not registered business' we have to be careful to keep purchases under $200 per item for capital purposes as it is. Once we add value to the house, a percentage, and inflation thereafter becomes taxable annually. Do not claim these as it is something we are not entitled to. We just got audited and it was in the area of maintenance and home improvements. Fortunately as we have had our house appraised three times by the same company, when we purchased, prior to renovation and then just this past August, we were able to contact the appraisers and request something in writing to prove that our house value had not been effected by the work we had done....as I had originally said it was due to us losing some rooms and gaining another...just reconfiguring the space to be more usable for our needs, not actually adding space. We had to fork out over $500 for this in writing, and we didn't get off scott free. The CRA accepted some of the expenses, but not others depending on whether it was cosmetic or structural work. In the end we were out of pocket as a result. Our accountant was very helpful in going through things step by step. They said we were entitled to claim all of it as it was submitted, but that it is a grey area and although the law says one thing, sometimes it is dependent on the cra auditor and at their discretion.

Whatever it is done now, all cleared up last week so it's funny that this should appear on the feed. I understand now moving forward and will only be submitting for cosmetic in the future and repair of daycare items not property....frustrat ing though when I have to replace a carpet damaged as a direct result of a daycare childs actions, but then I get pulled for claiming!!

[Gibbon]

Got almost the same question. It's so difficult to figure all out. There are so many things to take into account. I think it's easier to hire a professional who'll consult on this question.