# renting basement from my second house



## Jocose (Nov 12, 2012)

I own a house in Calgary (my wife and I are on title).
Thinking of buying another one in Calgary for my parents with a basement suit as a mortgage helper.
My parents will not pay me rent, but tenants in the basement will, so I should treat it as a rental property I think. Then I can claim my profit from renting it and write off some expenses. The house will need some TLC.

Questions:
1. Would it be legal to claim income from basement only, but write off, let's say, new roof for the house?
2. I've been thinking to put my mother on title for this house. If my dad file bankruptcy, can they come after this house, which would be under my and my mother's names? 
3. Why I wouldn't want to put my mother on title? I trust my parents, and they won't screw me over. She works, but doesn't make enough money to pay for mortgage, so she is not a co-signer by any means.

Thanks for your thoughts in advance.


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## Charlie (May 20, 2011)

If you rent out the basement you can only deduct the portion of expenses related to the rental. If a roof qualified as repairs, you'd prorate on personal (mom and dad) vs income. Possibly the roof would be capital and not deductible.

Sounds like your dad's financial situation might be dicey? If your mom's on title and your dad didn't gift her the home you should be OK.

Why not gift the home outright to your mom? (consider registering a second mortgage to protect your initial invest). Any gain would then be eligible for her principal residence exemption. You'd have to have her rework her will to be sure you got the home before any other asset split -- and that it didn't go to your dad if you're concerned about his creditors. You could do whatever guarantees cosigning is necessary with the bank. But kids buying parents a home with the provision it goes back to them in the will is pretty common.

Hopefully your home isn't underwater.....good luck to you all in cowtown. Stay dry!


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## Young&Ambitious (Aug 11, 2010)

The roof would be a capital asset, you would not be able to write this off. This and many other expenses would be split between the rental and non-rental space. Look on the CRA website, they have all the info you will need about rent expenses and deductability. Depending on the complexity of your situation, it may also be advisable to speak with an accountant. Goodluck.


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## Jocose (Nov 12, 2012)

Charlie said:


> Why not gift the home outright to your mom? (consider registering a second mortgage to protect your initial invest). Any gain would then be eligible for her principal residence exemption.


As I understand, all the persons, which responsible for mortgage, must be on title, so I can't just gift the house to my mom.



Charlie said:


> Hopefully your home isn't underwater.....good luck to you all in cowtown. Stay dry!


I don't have that much money to buy property by the rivers or in inner-city, those are the areas that have been affected mostly in Calgary.

Thanks for your response.


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## Jocose (Nov 12, 2012)

Young&Ambitious said:


> The roof would be a capital asset, you would not be able to write this off. This and many other expenses would be split between the rental and non-rental space. Look on the CRA website, they have all the info you will need about rent expenses and deductability. Depending on the complexity of your situation, it may also be advisable to speak with an accountant.


Thanks, I didn't know that and I'll do more research.


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## sprocket1200 (Aug 21, 2009)

smart decision by them to rent.

it is too expensive to own now, tell them to wait until housing is cheap enough to buy....

oh, sorry, it is a good investment for you though.... haha



Jocose said:


> I own a house in Calgary (my wife and I are on title).
> Thinking of buying another one in Calgary for my parents with a basement suit as a mortgage helper.
> My parents will not pay me rent, but tenants in the basement will, so I should treat it as a rental property I think. Then I can claim my profit from renting it and write off some expenses. The house will need some TLC.
> 
> ...


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