Canada rental property depreciation

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Canada rental property depreciation

Post by bayarea_dreamer » Sun Jul 12, 2020 8:31 pm

We are currently living in California but we have a rental property in Canada - Calgary. We want to calculate the depreciation for this to fill in the US tax returns (Form 1040 Schedule E). That will mean we will need to distinguish between the:

- price of the land and
- the price of the building on top of it because depreciation can only be claimed on the building.

But unfortunately neither the Calgary property tax document, nor the insurance document from our insurers specifies the difference between these two. So how do we calculate the difference? FYI when we bought the property in 2016 we paid $460000 for it.

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Re: Canada rental property depreciation

Post by nelsona » Mon Jul 13, 2020 7:05 am

A local realtor would be able to give you a reasonable estimate, in writing, as to the land's value at the time of purchase.

Remember that if your depreciation on your US return lowers your net rental income to zero, it would be wise to CCA the property on your CDn return to reduce the new rental income on your CDn 216 return.
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