# deduct water heater rental for rental property?



## digitalatlas (Jun 6, 2015)

For a rental home, where the entire property is rented out but the tenant pays all utilities (electricity, gas, water, cable) but I pay for the rental water tank, is this rental fee tax deductible? It only adds up to about $400 a year, but still.

From the CRA, it says this about utilities:

"You can deduct expenses for utilities, such as gas, oil, electricity, water, and cable, if your rental arrangement specifies that you pay for the utilities."


Now, for the month when I did not have a tenant, I incurred some electricity, gas, and water charges. I did not deduct these expenses, since they would not be part of the rental agreement. However, I would think that for the months while it is rented out, since I pay for the rental water tank and there is no expectation that the tenant pays for that ever, I think this should be tax deductible, right?

Anyone have any experience or insight into this?

Thanks.


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## Just a Guy (Mar 27, 2012)

The general rule of thumb is, any expenses you incur in the process of making money can be deducted. There are some items which can only be deducted if you pass a certain threshold of properties (I think you need to own 3 to write off things like tools, travel, etc.) but for direct costs, there aren't any issues usually. 

So, your utilities during a vacancy and the hot water rental should be a deduction. How you write them off (expense, capital depreciation or whatever I don't know. I hire an accountant as this isn't my area of expertise, but it's how it was explained to me.


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## digitalatlas (Jun 6, 2015)

Just a Guy said:


> The general rule of thumb is, any expenses you incur in the process of making money can be deducted. There are some items which can only be deducted if you pass a certain threshold of properties (I think you need to own 3 to write off things like tools, travel, etc.) but for direct costs, there aren't any issues usually.
> 
> So, your utilities during a vacancy and the hot water rental should be a deduction. How you write them off (expense, capital depreciation or whatever I don't know. I hire an accountant as this isn't my area of expertise, but it's how it was explained to me.



Thanks a lot. I read the CRA statement as, if I were paying for utilities as part of the rental agreement, then I would be able to deduct the expense. I actually don't pay for the utilities except for the water heater rental. I'd probably feel like I'm on more solid footing claiming the water heater rental than the others.


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## CalgaryPotato (Mar 7, 2015)

Can you rent out the house without a hot water tank? I mean regardless of whether or not they pay the utilities, an actual working water tank, is something you need to rent out the house. 

Not to be silly, but that would be almost like saying you can't write off the stove and fridge you purchase for the rental unit, unless you buy their food too.


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## stardancer (Apr 26, 2009)

Hot water tank rental is a valid expense; since you rent out the whole house, it is a 100% expense. You can claim for the other utilities for the months in between rentals; however, keep all evidence of your trying to rent it out if it drags on too long.


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