My client sold his rental and I am calculating the amounts for capital gains. Can the interest he paid on the mortgage be deducted anywhere: ACB or proceeds of disposition? (other than on the rental statement) I prepare mostly simple returns and haven’t come across this one yet. Please help.
Thanks in advance.
Double dipping is basically, well, fraudulent.
He has already deducted his interest on his T776s…
What Joe means is that the mortgage interest CAN be deducted on the rental statement. It CANNOT be deducted anywhere else.
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No, as others have said. You may be thinking about the interest that gets capitalized on vacant land held for future resale (not rented out).
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You cannot deduct your mortgage interest and property taxes for vacant land if you are not earning any income from that land. You cannot add these expenses to the adjusted cost base of your land. In addition, you cannot deduct income taxes, profit taxes, or land transfer taxes you have for the vacant land.
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Although not relevant to the original poster’s question, my reply is that it depends on the years that the vacant land was being held for resale/development
https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/it153r3/archived-land-developers-subdivision-development-costs-carrying-charges-on-land.html
I do acknowledge that sometimes vacant land is rented out to be used as a parking lot, which would allow the deductions to be claimed.
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So the short and only relevant answer is that since the interest was already claimed in the past, it is not included in the ACB.
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