Prepaid expenses
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Prepaid expenses
Prepaid expenses are expenses you pay for ahead of time. Claim any expense you prepay in the year or years in which you get the related benefit.
Example
Maria paid $2,100 for insurance on her rental property. The insurance was for the current tax year and the two following years. Although she paid the insurance for three years, she can deduct only the part that applies to the current tax year from her gross rental income. Therefore, Maria can deduct $700 in the current tax year and $700 in each of the following two years.
Forms and publications
- Guide T4036, Rental Income
- Form T776, Statement of Real Estate Rentals
- Interpretation Bulletin IT-417, Prepaid Expenses and Deferred Charges
- Date modified:
- 2016-01-05