CRA Repairs & Maintenance Reviews Spotted!
We have it on advice from industry insiders that the Canada Revenue Agency has launched a project to review repairs and maintenance expenses, as well as capital asset purchases, for small and medium corporations & rental businesses across Canada. The CRA will be closely scrutinizing these expenses to ensure they are indeed eligible repair expenses and can therefore be fully expensed in the year incurred, and not capital asset purchases or “betterments” that need to be depreciated for tax purposes using Capital Cost Allowance (CCA) over multiple years.
What does this mean for you?
If you have repairs and maintenance expenses in your rental or business, make sure you’ve got the proper supporting documentation and calculations in place NOW before you’re asked to produce them on an imposed deadline. You may receive a letter from the CRA in the near future asking for details and supporting documentation on repair expenses you’ve incurred in the past few years.
If you do and you’d like us to assist you in responding to CRA, let us know!