Dayhome toy write offs

[Allimd55]

Hi, I am opening up a Dayhome in the new year, February 2016 and I live in Alberta and I just got my basement finished to use for my main room of the Dayhome and I already bought most of the toys and furniture I will use for my Dayhome but what I'm wondering is will I even be able to write any of the huge amount of money I have used already seeing I'm not even opening it till the new year. So I'm just wondering if anyone knows if I will be able to write it off for this upcoming tax year. I sure hope so because I have spent a lot of money setting up my basement. I have children so wanted them to be able to use the basement and I babysit my friends son on weekends so wanted the basement for that use as well.
Thanks for any help anyone can give me on this.
Allison

[Lee-Bee]

You can typically write off toys as a daycare expense but since you purchased them far ahead of opening odds are you can't. I vaguely recall that when you first open you could write them off if purchased one month prior to opening. But, my brain is fried these days so you'd have to look that up officially.

[kindertime]

You really should check with CRA, but I don't think there is much you can claim in terms of home renos, because it adds to the value of the home. As for toys, and furniture, you may be able to claim them as a capital cost deduction - claiming a percentage per year for a number of years, but again, until you actually open, maybe not. It sounds like you are ready or close to it, would you consider taking just one child starting in 2015, so that you could claim these expenses?

[mickyc]

I claimed all my expenses my first year no matter how far back it went before I started. Pretty sure my accountant even started claiming a portion of my household expenses (phone, hydro, Internet, interest on mtg) 6 months before I opened. You can also claim your renos although it's not the full amount. My best advice is to get a good accountant now and set up a meeting so you know exactly what you need to keep track of.

[playfelt]

Yes keep all of your receipts and anything that you bought to set up your daycare is claimable. In theory what is happening is that you bought the item personally prior to the date your daycare opens and then you are selling the item to your daycare on the day you open so now the item belongs to your daycare.

As to claiming the construction of the basement room that is not a good idea because when you come to sell the house that portion of the house will be subject to capital gains taxes. What you can claim is things that went onto it like the paint, shelving, flooring - the kind of stuff that is replaced every so often so carpet yes but studs and insulation for the walls no. If you installed new light fixtures where there were previous basement lights then those would be claimable.

[5 Little Monkeys]

I'm not sure how far back you can go but a good accountant should be able to help you with that. For myself, it was only about a month or so after deciding that I was going to do it before I was up and running. I bought things during this time and claimed them but I didn't claim any household bills etc until I was open and officially using my home as a business full time.

[Allimd55]

Thank you for all the advice, I have made an appointment with an accountant to see what my options are on all of this. I appreciate the feedback!!

[playfelt]

You can "sell" any item you personally own to your daycare even if you have owned it forever. Things such as highchairs or playpens or safety gates you have stored that your own children have outgrown are good examples. Think of it as going to a garage sale and buying what you need. So you sell the item to your daycare at a garage sale type price (generally 1/3-1/2 of retail paid). But for anything that was bought with the daycare in mind and not used by you at any previous time that is a new item and you can claim it against your daycare. Logic says you wouldn't have been hording that kind of thing up for many years so it is likely from the time you decided to open a daycare which technically becomes the start of the planning process.