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How to file tax return for a US rental property


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You need to file the T776 and convert all revenues and expenses to CDN currency. If you paid US tax you will also need to report that as foreign tax paid to claim a foreign tax credit. For the CCA schedule you need to convert the acquisition cost to CDN currency. Now something that is not well known is the actual cost of the property if you have a loan in US currency. The principal payments on the US loan should be allocated to the cost at converted dollars over time for the CDN T776 CCA schedule. For instance if the loan is a US loan then each month you make a payment the principal portion converted to CDN dollars can add to or reduce the original converted acquisition cost based on currency fluctuations. Since you did not actually pay in cash for the property the CDN cost will change over time and can only be allocated as you make the loan payments. Any cash you paid up front of course will be added to the cost when you paid it. If the loan is in CDN currency then the above does not apply.

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