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Investor home owners looking for a tax break on losses wait for CRA’s tap on the door

Letters asking about profitability from the CRA to landlords looking for tax relief on losses are nothing new, says tax specialist

There are hundreds of thousands of rented homes that do not turn a profit for their owners, but if you’re a landlord looking to the Canadian Revenue Agency for a tax break on those losses you can expect to have to answer some tough questions on your investment.

Realtor Brian Keller has been a landlord for 23 years and, after reporting losses on his 2021 tax returns relating to his rental business he received no updates until almost a year later when a six-page questionnaire arrived in the mail.

“Provide a detailed projection of how you intend to develop your rental operation into a profitable enterprise,” the letter from CRA reads, among other things.

“I can’t believe the audacity of Revenue Canada to ask me for a business plan,” Mr. Keller said. “And they want it in 20 days. This is almost an act of intimidation. …[Continue Reading]