Rental Income - Expenditure relating to motor vehiclesYou can deduct motor vehicle expenses under certain special circumstances. For more information, please visit the following links:
https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4036.html
You can enter motor vehicle expenses under "Rental income".
We suggest that you enter the motor vehicle expenses in the rental property that has net income before expenses for the vehicle.
To deduct the expenses of your vehicle, follow the procedure below;
1. On the "Left side menu on the Interview tab", select the "Rental income" item.
2. Under this heading, choose the sub-section "Motor vehicle expenses".
3. On the "Motor Vehicle Expenses" page, choose the option that is right for you. You will note the rules regarding the circumstances that allow you to deduct vehicle expenses are stated on this page.
4. Enter the information pertaining to the vehicle and choose the appropriate option from the drop-down menu for the line "Level at which the expense is claimed", choose the "Business expenses" option. However, note that you could choose another option.
5. If you have opted for a purchased vehicle and it is the same vehicle as the previous year, on the line "Opening balance of the undepreciated capital cost" enter the UCC which you will find in Area A of Form T2125 in column 10 of your tax return of the previous year.
However, if this is the first year of use of this vehicle for business purposes, do not enter an amount on this line. Go to the line "Amount of capital additions" instead and enter the fair market value (FMV) of the vehicle.
6. For a purchased vehicle, on the line "CCA class of the vehicle" select the class of your purchased vehicle from the drop-down menu. The CRA considers that a vehicle with a cost that is less than $ 30,000 before taxes is Class 10 and other vehicles are considered Class 10.1.
7. To determine the part of the expenses applicable to your business, enter the "Kilometres travelled for business or work" and the "Total kilometres travelled".
8. Then, enter the motor vehicle expenses you have incurred.
9. If you have a leased vehicle, it is important that you complete the leasing cost section appropriately.
NOTE: We suggest that you keep all of your documents, as well as a record of the kilometers you drove for your rental properties and the total kilometers driven in the year.
The calculation of eligible motor vehicle expenses will be detailed on page 4 of form T776 for the federal government and TP-128 for Quebec.
ID: 20200831102851NA.xml
Webpage: KPA320-20200831102851NA.htm