According to CRA, paying a tenant to cancel a lease is a claimable expense. However the calculation they have on their site doesn’t make sense.
re:
Calculation of the amount of the cancellation payment you can deduct if you made the payment in the year
Cancellation payment × Number of days to the end of the year when payment is made ÷ Number of days left on the lease.
so in my case, payment $5000 was made Feb 15, 2023, lease was valid til Oct 1, 2023. Based on the calculation provided by CRA: $5000x(319/272) =$5863
it makes no sense? Should one assume that if time remaining in the year is greater then time remaining on the lease then it would be a 100% claim of $5000 ? Just doesn’t add up , any insight ?
