Hey everyone, I’ve got a question about rental loss tax deduction. If I don’t have any income this year (so no income tax paid), but I have a significant rental loss to claim, how does that work? Can I still get a rent loss tax deduction from CRA, or is it possible to defer it to next year? Any insights would be appreciated!
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Great question! Rental losses can be tricky. In general, if you have no other income, you won’t be able to claim the deduction this year since there’s no income to offset. However, you’re not out of luck. You can carry forward the rental loss to future years when you do have income.
The CRA allows you to carry forward non-capital losses (which include rental losses) for up to 20 years. So you can use this loss to reduce your taxable income in any of the next 20 years when you have income to report.
Just make sure to keep detailed records of your rental income and expenses for when you do file your taxes, even in a year with no income.
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Are u sure about that? I thought u could only carry forward capital losses, not rental losses.
Actually, @WittyBroom2004, rental losses are considered non-capital losses for tax purposes. The CRA does allow you to carry these forward. Here’s a direct quote from the CRA website:
“You can carry forward your non-capital losses from business or property to the next year and deduct it from any source of income in that year. If you still have a balance after that, you can carry it forward for up to 20 years.”
So @silly658 is correct. The important thing is to report the rental activity on your tax return even if you have no other income, so the loss is documented and can be used in future years.
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