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:
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 ?
You'll need to sign in or create an account to connect with an expert.
The lease termination payment is an expense incurred in ordinary course of business. You can deduct what you paid - $5,000. You can't deduct something you didn't pay, and you should deduct the full amount that you paid - no more, no less. Claim an expense deduction for $5,000.
The lease termination payment is an expense incurred in ordinary course of business. You can deduct what you paid - $5,000. You can't deduct something you didn't pay, and you should deduct the full amount that you paid - no more, no less. Claim an expense deduction for $5,000.
David, totally agree, I had no intention of claiming more then what I actually paid, but the example provided by CRA could cause issues and really wanted clarification.
thanks again 👍
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
smerchant159
New Member
venkmangt99
New Member
VSRS
New Member
jpr0v1957--
New Member
FoundlingsAreOurFuture
Level 2
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.