You can deduct legal, accounting and other professional fees which are directly related to the ongoing operations of an income/rental property provided these fees are not part of the acquisition or deposition of an asset.
Fees which are part of acquisition are added towards to Adjustable Cost Base (ACB) and subtracted from the final sale price upon deposition to calculate the portion of taxable Capital Gains.
- Buying a condo for $300,000 and incur $5,000 in fees (Added to ACB)
- Fees to maintain running operations (Claimed as yearly tax deductions for the year they were incurred)
- Selling the same condo for $355,000 and incurring $5,000 in fees (fees are subtracted from the final sale price and the difference between the ACB of $305,000 and $350,000 is subject to capital gains)
This example demonstrates how ongoing fees associated with the running of the property can be claimed immediately and other fees associated with the acquisition and deposition of the property see tax deductions later during the deposition of a property.