Tax Question - Write Off.

[liquid]

I'm sure a few of you guys have a home business, and I just have a quick question regarding the tax implications of that. Is it true that you cannot write-off a portion of your mortgage payment, but just the portion of heat, elec, etc...

Also, if I wrote of 10% of that as business expense, would I then have to (some time down the road when I sell my place), declare 10% of the capital gains as income?

Thanks.

[Canadian Turbo]

Re: Tax Question - Write Off.

You can write off a portion of the interest on your mortgage but not the principle, and there is no capital gain on that portion when you sell the house then.

[Stonewall]

Re: Tax Question - Write Off.

The % of the intrest on your mortage that you can write off is dependant on the % of your square footage you use for you home based business. From what I was told on some courses I took on home businesses that most people just use 15% (unless your place is really small) as a standard.

[Canadian Turbo]

Re: Tax Question - Write Off.

You should have a calculation to prove your amount. Take the amount of space you use as an office (one bedroom or something) divided by your total area of the house and that is the percentage to be used. Most people are between 10-15% anything over 20% is getting questionable.

[gaffer]

Re: Tax Question - Write Off.

The max amount that you can claim for your City of Calgary home occupation permit is 20%, so I have been using 20%.

Andrew

[liquid]

Re: Tax Question - Write Off.

Well Thanks for the help/advise guys, much appreciated.

[Billip]

Re: Tax Question - Write Off.

Well Thanks for the help/advise guys, much appreciated.

I'm hesitant to write off any portion then, as I really don't want to have to claim that portion of capital gains as income when the day comes.

You don't have to pay capital gains at all.

[liquid]

Re: Tax Question - Write Off.

You don't have to pay capital gains at all.

Oh shoot, that's right... It's my primary residence. My bad, it's early