Introduction

Depreciation plays a critical role in real estate investment; it represents a method for investors to offset their investment costs against their income. One area that often confuses many investors in Canada is the separation of land and building value. This article aims to demystify this process and provide a clear pathway to separate land from building value for depreciation in the Canada Revenue Agency (CRA). We will look at three primary ways – using the CRA website, its mobile app, or via a call centre.

Using the CRA website

The CRA offers robust online tools to help you navigate various processes, including property depreciation. Here's a step-by-step guide on how to separate land and building value on the CRA website:

• Log in to your account: Use your CRA user ID and password to access your account. If you haven’t created one yet, it would be best to do so.
• Property Details: Click on the 'Property' tab and look for your property details. This section will show you all the data related to your property, including price and valuation.
• Capital Cost Allowance: From the detailed property information, you need to find your capital cost allowance (CCA). This is where the value of your building and land will be separated.
• Calculation Form: Use the CCA calculation form to enter the values of your land and building separately.
• Submit & Save: After entering all the necessary information, click on the 'submit' button to finalize the changes. Don't forget to save a digital or a print copy for your records.

Using the CRA Mobile App

Convenience is at the core of the CRA mobile app. You can access your account and separate your land and building value for depreciation on the go. Here’s how:

• Secure Login: Sign in to your CRA account using the mobile app.
• Access ‘My Property:’ Under the 'My Account' menu, find the 'My Property' section. Here, you'll find an overview of your real estate properties.
• Capital Cost Allowance: Similar to the website, you'll need to navigate to the CCA section.
• Separation of Values: Use the CCA form available on the app to enter land and building values separately.
• Submission: Once you’ve separated the values, submit the form and ensure to keep a record.

Using a CRA Call Centre

If digital platforms are not your best bet, you can always separate your land and building value through a phone call. Contact the CRA directly by calling them at their designated contact number:

• Speak to an agent: Once the call is connected, state your purpose – that you wish to separate land and building value for depreciation.
• Provide necessary information: The agent will guide you through the process, asking for essential property details. Make sure you have all the information readily available.
• Record the information: Note down any reference number, agent details, or pointers that the agent provides for future reference.

Conclusion

Knowing how to separate land and building value for depreciation allows property owners to maximize their tax benefits. Whether you prefer to handle things online or by phone, the CRA provides reliable pathways to help you manage this efficiently. Remember, keeping a record of all your communications and changes is crucial for future reference and in case of audits. With the right approach and guidance, depreciating properties can be a breeze!