Deducting rent expenses for a home-based corporation

Deducting rent expenses for a home-based corporation

If you operate your business from your home, you may charge rent for the portion of your home used for work purposes.

These expenses may include:

property taxes,

utilities such as gas, water, and electricity,


home insurance,

general repairs and maintenance.

When you charge rent to your corporation, the rental income will be taxable to you as an individual, but the rental expenses you incur, can be used to offset the taxable amount.

The rental income must be reported on your income tax return.

To claim expenses against your rental income, they must be directly related to earning the rental income.

To determine the expenses that can be deducted in computing the rental income, a reasonable method could be to divide the area used for the income-generating activity by the total area of the property.

If the space is also used for personal purposes, a further reduction must be made based on the time used for non-business activities.

“Please note that the information provided in this article is of a general nature and may not be accurate for your specific situation. The information is current as of the date of posting and is not intended to provide legal advice. It's always recommended that you consult with a professional accountant and lawyer for personalized guidance and advice."