Status Indian - Rental incomeIf you are a Status Indian and are exempt from paying certain taxes, you must indicate this in the program. This will allow the program to exempt the income tax you earned on a reserve.
Please complete the first step as follows:
1. On the "Left-side menu on the Interview tab", select the topic "Interview setup".
2. On the screen to your right, check the box for "Tax return for a Status Indian". Then go to the "Rental income" group and check the box "Rental property income" and click "Next" at the bottom of the page
3. Return to the "Left-side menu on the Interview tab" and select the "Status Indian".
4. On the page that appears on the right entitled "Status Indian exemptions", to the question "Please confirm that you are a Status Indian ", you must answer "Yes" (i.e you are a Status Indian).
Quebec residents should indicate their information for the "Quebec drug insurance plan". You should specify your situation by selecting option "4 - Exceptions, Quebec insurance plan, all year" and specify the exceptions by choosing "Registered Indian (code 24)".
To help you determine if your income is taxable or not, we suggest you visit the following CRA link:
https://www.canada.ca/en/revenue-agency/services/aboriginal-peoples/indians.html
For residents of Quebec, consult the following link:
In general, the income you derive from rental property is not taxable if the property is located on a reserve.
However, if the property is located outside the reserve, your net rental income is taxable.
To enter your rental income on a reserve, follow these steps:
1. On the "Left-side menu on the Interview tab", select "Rental income".
2. On the page that appears to your right, click on the plus sign "+" icon to the right of the line "T776 - Rental Income property".
3. 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.
4. Please indicate whether you are the 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 applies best to your situation from the drop-down menu.
5. On the next page, "Income, expenses", enter your income and expenses in relation to this property.
6. If you used the services of a professional contractor to repair your building, use the subsection "Labor costs" to enter the relevant information. Please make sure in this subsection that the amount paid for the 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".
7. If you want to claim depreciation for your property, click on the "CCA" subsection and select the appropriate class, usually Class 1.
8. At the line "Opening balance of the undepreciated capital cost", enter the UCC amount that you will find in Section A of Form T776 in Column 10 of your return for the previous year.
9. If you do not want to claim depreciation on this property, go to the line "Limit to the CCA of this class" and enter "$0.00".
10. Subsequently, select the tab "Tax Return", from the program Header, and from the left-side column, locate the line "T1 Federal p3" and from line 12600 make note of the amount of net rental income.
11. Return to "Interview" and on the "Rental property income and expenses" page, go to the line "Amount of net rental income exempt under section 87 of the Indian Act" and enter the amount from line 12600 of the federal return.
No amount will be entered on line 12600 of the federal return and you can file your return via NETFILE.
However, if your rental property is located outside the reserve, the net income is taxable.
You must follow the procedure, as indicated in points 1 to 9 inclusively.
Your net rental income will be entered on line 12600 of the federal return.
ID: 20201130101934NA.xml
Webpage: KPA310-20201130101934NA.htm