If you are buying a gift basket for your tenant that you earn property income from, and you have the receipt and you document their name, I don't see why you can't deduct it as an expense.
When recording the gift card in the accounting software- food and restaurant gift cards would be under “meals and entertainment”- but where would another non-food gift card go under to make it 100% deductible?
It goes back to what you use as your chart of accounts to be consistent year over year. Some people treat it as office expense, some people treat it as advertising and marketing. Again, goes back to your own situation and how you use these giftcards for.
Sure, but it has to be related to business reason. If the director is doing something for the business, and you're paying the director for the services provided to the business, then yes, you can deduct the gift card. If you can't provide a valid reason (establish the cause and effect relationship), it would be difficult to convince CRA.
Good information. But I like to support local businesses by buying their gift cards, so Amazon won't do, unfortunately. And giving them a lumber store gift card tells them that I think their home needs updates. Thats also kinda rude. Good points though. Love the content.
Of course, everyone's business is different. We work with many different real estate investors and they always have something they need to fix at their renal properties. :) I also support local businesses as well... we just support them in different ways...
What other gift cards qualify as 100% deductible? Or what is the criteria? Amazon GCs are great but it’s nice to have some options that fit the particular relationship.
Gas company such as Petro Canada or Esso would work. Apple (the computer company) giftcard can work as it is not related to groceries. Mastercard and VISA cash card would also work. The challenge is that you would have to keep track of the person that you gave the gift card to. In case CRA ever asks, you would the corroborative evidence to support your claim.
Only if you have proper documentation that you are giving it out to earn business income or property income and assuming it is not from a groceries store/restaurants/alcoholic drinks, etc.
The only thing I don't love about amazon is that they aren't a local company, I really like to support local business' when I buy gift cards for my tenants:)
Thank you for this info! I am always excited to learn how to deduct more items! Do you know where/if you can create content on Incorporation Set Up strategies when it comes to flipping real estate and getting into long term rentals. (all the Ontario info is for Realtors! I am not a realtor, I am a hands on GC that buys and repairs the properties) How do you set up your/recommend to set up a portfolio/properties when youre starting out in flipping and growing into long term rentals! Thanks for your time and videos!
Hi Kevin, we have a free report on RealEstateTaxTips.ca on flips if that is something you're interested. In terms of structure, it is individualized and you might want to schedule a call with our team.
Hi Cherry, Great tips, love all your informative videos, thank you! I have a question on Gift Cards. If I manage my own rental property (duplex), and I periodically use my father to go to the property to fix things for the tenants, if I buy him a $500 Gas Gift Card to thank him for the time/help, can I include the $500 Gas Gift Card as a 100% tax deduction? Are there any maximums on the amount you can claim for Gift Cards? Thanks, Jeff
The key here is documentation. You might gift him $500 gas giftcard, but you need strong evidence showing him why it is worth $500 and what he had done. Because he is your dad, if you ever get audited, CRA probably takes a very aggressive stand and disallow it.
I generally group it in either Advertising or the Other line. The line is less important, but the proper documentation such as receipt and the person you gave the giftcard to and the establishment between incurring the expense and earning the income are the key to earn your deduction.
What about Starbucks gift cards? Are they treated as restaurants?
Yes
Thank you! Thanks for the great video too. It was very helpful.
If I give a gift basket to my renter, is the expense deductible? Thank you!
If you are buying a gift basket for your tenant that you earn property income from, and you have the receipt and you document their name, I don't see why you can't deduct it as an expense.
thank you for the tax tips!
Glad it is helpful
When recording the gift card in the accounting software- food and restaurant gift cards would be under “meals and entertainment”- but where would another non-food gift card go under to make it 100% deductible?
It goes back to what you use as your chart of accounts to be consistent year over year. Some people treat it as office expense, some people treat it as advertising and marketing. Again, goes back to your own situation and how you use these giftcards for.
Can a corporation gift a gift card to its director ie gas gift card for travel..?
Sure, but it has to be related to business reason. If the director is doing something for the business, and you're paying the director for the services provided to the business, then yes, you can deduct the gift card. If you can't provide a valid reason (establish the cause and effect relationship), it would be difficult to convince CRA.
Good information.
But I like to support local businesses by buying their gift cards, so Amazon won't do, unfortunately.
And giving them a lumber store gift card tells them that I think their home needs updates. Thats also kinda rude.
Good points though. Love the content.
Of course, everyone's business is different. We work with many different real estate investors and they always have something they need to fix at their renal properties. :)
I also support local businesses as well... we just support them in different ways...
Like your tips
Glad to hear that
Very good information, and very good explanations outlining the reasoning why (or why not) something is (or isn't) deductible! Thank you :)
Glad you like it 👍
What other gift cards qualify as 100% deductible? Or what is the criteria? Amazon GCs are great but it’s nice to have some options that fit the particular relationship.
Gas company such as Petro Canada or Esso would work. Apple (the computer company) giftcard can work as it is not related to groceries. Mastercard and VISA cash card would also work.
The challenge is that you would have to keep track of the person that you gave the gift card to. In case CRA ever asks, you would the corroborative evidence to support your claim.
Hi Cherry, what other cards are 100% deductible?
Amazon and gas gift cards are some examples that you can deduct 100% provided that you have the business reason AND you have proper documentation.
are gas gift cards fully deductible?
Yes, 100% deductible provided that you have proper documentation and cause and effect relationship.
Very clear and helpful. Very good tip about Amazon card. Thank you very much. What about Visa gift cards? Are they 50% or 100% deductible?
Since VISA isn't tied to any grocery store, I would say that VISA is 100% tax deductible. Only downside is that they charge an administrative fee.
Thank you very much, Cherry!
This was very helpful. Thank you.
More small business expenses videos like these please!
100% deductible?
Only if you have proper documentation that you are giving it out to earn business income or property income and assuming it is not from a groceries store/restaurants/alcoholic drinks, etc.
Great tip with the amazon gift card! love it!
The only thing I don't love about amazon is that they aren't a local company, I really like to support local business' when I buy gift cards for my tenants:)
I still buy local businesses, primarily restaurants, gift cards to give away, knowing that I can only deduct 50%.
Informative video, Cherry! Keep it up! 😊
Great. Also can you give a brief info about the ways of withdrawing the money from corporation or business tax efficiently? Like salary and others
Absolutely. Will keep this in mind for future videos.
Thank you for this info! I am always excited to learn how to deduct more items! Do you know where/if you can create content on Incorporation Set Up strategies when it comes to flipping real estate and getting into long term rentals. (all the Ontario info is for Realtors! I am not a realtor, I am a hands on GC that buys and repairs the properties)
How do you set up your/recommend to set up a portfolio/properties when youre starting out in flipping and growing into long term rentals!
Thanks for your time and videos!
Hi Kevin, we have a free report on RealEstateTaxTips.ca on flips if that is something you're interested.
In terms of structure, it is individualized and you might want to schedule a call with our team.
Great tips Cherry!! I'm learning so much from your webinars, emails and TH-cam channel! Thank you!
Thank you.
Hi Cherry,
Great tips, love all your informative videos, thank you!
I have a question on Gift Cards. If I manage my own rental property (duplex), and I periodically use my father to go to the property to fix things for the tenants, if I buy him a $500 Gas Gift Card to thank him for the time/help, can I include the $500 Gas Gift Card as a 100% tax deduction? Are there any maximums on the amount you can claim for Gift Cards?
Thanks,
Jeff
The key here is documentation. You might gift him $500 gas giftcard, but you need strong evidence showing him why it is worth $500 and what he had done.
Because he is your dad, if you ever get audited, CRA probably takes a very aggressive stand and disallow it.
which line on the statement of real estate rentals would you put the gift card on if you're getting your tenant a gift card for christmas?
I generally group it in either Advertising or the Other line.
The line is less important, but the proper documentation such as receipt and the person you gave the giftcard to and the establishment between incurring the expense and earning the income are the key to earn your deduction.
@@RealEstateTaxTips thank you