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US Property Rental Income


gcristello
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Hello,

 

This is my first year using ufile and having a us rental property. Can someone tell me exactly what forms are required to be filled out for the CRA and how I can complete the US tax return for the IRS? Can this be done through ufile?

 

I have an ITIN already and have not had the 30% deducted.

 

 

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Unfortunately, we cannot give you instructions regarding the US tax return which cannot be filed through UFile but about the canadian return, here are instructions on how to report the foreign rental income:

 

To enter the amount of foreign rental income, you have two procedures to perform.

A. First, you must produce a rental income statement form by following these steps:

1. In the "QuikClik Navigator", located on the left-hand side of the screen, click on "Interview setup".

2. On the page appearing on the right, under the header "Income", check the boxes for "Rental property income" and "Foreign income or foreign property" (to be used in the second procedure) and click "Next" at the bottom of the page.

3. In the "QuikClik Navigator", select "Rental Income" and on the right-hand side, choose "T776 - Rental income property".

4. On the "T776 - Rental property identification" page, given that the property is located outside of Canada, you must enter a Canadian postal code, namely yours, in order for you to file the federal return via NetFile.

5. Once the information regarding the identification of the property has been entered, click "Next" at the bottom of this page and you will have access to the items "Income, expenses", "Labour costs", "CCA" and "Partners" in the "QuikClik Navigator". Complete the sections that relate to your situation.

B. Then, as a second operation, you must enter your net rental income and foreign taxes paid in the foreign income section by following these steps:

1. Return to the "QuikClik Navigator", select "Foreign income & property" and on the page appearing on the right, select "Foreign rental income".

2. After entering the description, the country where the income was earned as well as the other information, enter the net rental income in the field "Foreign business income entered as business income". If applicable, enter the amount of foreign tax paid on this rental income.

The foreign tax credit will be reported by the program on line 405 of federal Schedule 1, as well as on line 90 of Quebec form TP-772, Foreign Tax Credit. Furthermore, the program will generate federal form T776, Statement of Real Estate Rentals, as well as Quebec form TP-128, Income and Expenses Respecting the Rental of Immovable Property.

Under the "Results" tab, a Warning will be generated: "(F55) You entered a business or a rental property with an address outside of Canada". Note that it will not be possible for you to electronically transmit the Quebec return via NetFile. You should therefore print it and mail it to Revenu Québec.

For more information, please consult the following link:

http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rntl/menu-eng.html

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  • 3 months later...

Hello I followed your 2 procedures instruction. I have the following questions:

 

Under Section A item 4 "T776 -rental property identification" page, about the question "address of the property" I left blank, is it Okay?

 

Under Section B- Foreign Income-Rental page, I enter as you instructed, but 1) if I do not enter anything under this section, did not change my return at all. 2) if I enter different net rental income as section A, it does not change my return at all. I am wondering why do we need to do that?

 

Also does rental income apply to "income exempt under a tax treaty amount"? if yes does it apply to net rental income?

 

Thank you!

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For the address, indicate the actual address of the property except the postal code for which you do as mentioned in point A-4 above.

 

1) and 2): The foreign tax credit will be reported by the program on line 405 of federal Schedule 1, as well as on line 90 of Quebec form TP-772, Foreign Tax Credit. Furthermore, the program will generate federal form T776, Statement of Real Estate Rentals, as well as Quebec form TP-128, Income and Expenses Respecting the Rental of Immovable Property.

 

Concerning the last question, please consult the following link:

 

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns248-260/256/ncm-xmpt-eng.html

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