Subsection 45(2) and rental property income for co-ownership

[TarinLionel]

Hi there,
My wife and I live in BC but own a house in ON. CRA granted the status under subsection 45(2) for the house in ON as we are renting in BC. I understand I cannot declare the CCA on the house we own but must declare the rent we perceive from it. Am I allowed to declare management fees, mortgage interest, etc..? 
If so, as my wife and I are co-owner, should I create a rental property income for both of us splitting into 2 all the amounts so the expenses are indicated correctly on my and her tax return?

[Geo123]

Hello TarinLionel,

UFile – T776 / Rental Income and Expenses / Rental Expenses

 Rental income

 

To enter information about your rental income, follow the steps below:

 

1. On the "Left-side menu on the Interview tab", select "Interview setup".

 

2.  On the page that appears to the right, go to the "Rental income" group, check the box "Rental property income"

 

(also if you paid tax by instalments. Then go to "Tax paid by instalments and tax transfer" group, check the box "Tax paid by instalments and tax transfer" and click "Next" at the bottom of the page.)

 

3. Return to the "Left-side menu on the Interview tab", select "Rental Income".

 

4.  On the page that appears to your right, click on the plus sign "+" icon to the right of the line "T776 - Rental Income property".

 

5. Complete the first page entitled "T776 - Rental property identification". On the line for "Percentage (%) of personal use of your rental property", enter your personal use portion of the building. If you do not live in the building, leave the field blank.

 

(If you are the co-owner of the building with your spouse see point #11)

 

6. Please indicate whether you are sole proprietor or co-owner of the property, to do so, go to the "Type of ownership of the rental property" line and select the option that suits you best from the drop-down menu. Then, on the line "Percentage interest in the partnership" enters your percentage.

 

7. On the next page, enter your income and expenses in relation to this property.

 

8. If you used the services of a professional contractor to repair your building, use the sub-section "Labour costs" to enter the relevant information. Please make sure in this subsection that the amount of repair has not already been entered in the expenses beforehand: make sure to choose the appropriate option from the drop-down menu for the line "Do you wish to add these labour costs as an expense on the income statement".

 

9. If you want to claim depreciation for your property, click on the "CCA" sub-section and select the appropriate class, usually Class 1.

 

10. On the page that appears, enter the relevant information. If you do not want to claim depreciation, go to the line "Limit to the CCA" and enter "$0.00". However if you wish to claim a portion of the depreciation or any other amount, it is limited to the maximum amount of this category. Please note that you cannot claim CCA when you have a rental loss.

 

11. Select Business partners

*Spouse co-owner of this rental property

*Other partner or co-owner of this rental property