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    sucosam's Avatar
    sucosam Posts: 59, Reputation: 1
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    #1

    Mar 23, 2011, 02:54 PM
    Can I include new furnace in maintenance section of tax return
    Hi. I am NOT self-employed, however I work full time from my home-based office. As such I claim a portion of my heating, electricity and water each year. I also can claim any maintenance required to keep my office running (painting, lighting, etc). In Nov 2010, I installed a new furance, A/C and HRV unit. I was wondering if I can include a portion of that in the maintenance area of my tax return. I tried using the CRA website, the turbotax FAQ, even paid extra for the turbotax support, but so far have not received an answer. Anyone out know the answer to this?

    Thx.
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,301, Reputation: 7692
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    #2

    Mar 23, 2011, 06:55 PM

    Is your home a fully separate room from the rest of the house ( not a desk in the kitchen or front room)
    Also you would have to use depreciation ( my opinion) for the expected life of the unit. And then only that percent for the office.
    sucosam's Avatar
    sucosam Posts: 59, Reputation: 1
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    #3

    Mar 24, 2011, 06:30 AM
    My office is a room on it's own in my house. The furnace is of course in it's own room.
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #4

    Mar 24, 2011, 09:46 AM

    Fr_Chuck is corect - while you can deduct a proprated portion of the repair expenses in the year you incur them, any improvements or upgrades that add to the value of the house must be depreciated over the useful life of the equipment. So if the replacement heating and A/C units are an improvement over the old (increased efficiency perhaps) they would be considered an upgrade and hence would be depreciated. But before you start deprecating a portion of your house - be aware that when you sell the house your tax cost basis is reduced by the amount of depreciation taken over the years, and you lose at least a portion of the exclusion from capital gains taxes from selling your primary home. Assuming that your home office is a fairly small percenage of the overall square footage of the house - you would probably find that the complications of taking deprecaition isn't worth the hastle.

    For info on what expenses are allowable, and depreciation issues, see: Publication 587 (2010), Business Use of Your Home
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