Has anyone sold their home that they have used for home daycare...how does this affect your taxes when you sell as the home was used as a business?
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Has anyone sold their home that they have used for home daycare...how does this affect your taxes when you sell as the home was used as a business?
Why would it affect taxes? Home is personal asset not business asset. This why improvement not able be claimed but maintenance is.
Are you closing entirely so selling home mean close business or are you set up again in new residence?
I'm not selling but someone was telling me that if you operate a business out of your home, when you sell it....you will have to pay added taxes when you sell because you operated a business in the home...is this true?
Yes, I just heard about new rules coming into effect shortly that will make you pay capital gains on whatever increase in gain since you purchased, based on the % of square footage used for daycare purposes.
I googled the question and this is what I got from TurboTax
Capital gain and recapture rules will apply if you deduct Capital Cost Allowance on the business-use part of your home and you later sell your home.
from this site:
http://turbotax.intuit.ca/tax-resour...e-expenses.jsp
So if I am understanding correctly, if I have never claimed capital cost allowance on my house, the capital gains wouldn't apply to me if I sold it.
Can someone define "capital cost allowance" for me...on the home
I have never claimed capital cost or depreciation etc ever...but from what I understand (and if anyone can correct me)....it doesn't matter...you will still be taxed!
Rewind, Rewind, Rewind....Do not panic. This does not apply to home daycare businesses. We are not registered business', and nor do we need to be. We are sole proprietors and capital is only calculated on our purchases made above $200 per item and then with an annual depreciation for tax purposes. Many years ago I considered registering as a business so I could use my gross income when applying for a mortgage etc. My accountant strongly advised me against it because it is at that point that the home becomes capital and then what you are talking about would apply. But that isn't a new thing at all, it has been around for many years. Don't believe everything you read online, especially business rules. Many of them do not apply to home daycare providers.
I have operated my daycare in 3 homes I have owned in Ontario. This concern you have is unwarranted. I have also closed my business down once before. Only thing that can occur at that time is when selling business items/equipment. Fortunately I didn't sell mine as I didn't get around to it yet, and since then I have reopened my daycare.
OH! So this would only apply to REGISTERED businesses? I came across this when I was watching CP24 "HOT PROPERTY" SHOW....they were talking real estate business and when one sells a home that they had a business in, etc. etc. I was thinking 'WHAT"!
:(
What specifies us being a registered business? So, if we have a business identification number(BIN ontario) are we considered a registered business, or only if we have a BN(business number)? I'm going to email my accountant.