Status Indian - Rental income
If 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, go to section ?Special
situations? and check the box for "Tax return for a
Status Indian" 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 with rights to
exempt income", you must answer "Yes"
because you are a Status Indian.
Quebec residents must enter their information for
the "Quebec prescription drug insurance plan". For
this topic, you must specify your situation by selecting option
"4 - Exceptions, Quebec prescription drug insurance plan,
all year" and specify 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:
https://www.revenuquebec.ca/en/businesses/source-deductions-contributions/calculation-of-source-deductions-and-employer-contributions-in-certain-situations/employee-situation/indian-employee/salary-or-wages-from-employment-duties-performed-partly-or-entirely-on-a-reserve-or-premises/
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
property. If you do not live in the property, 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.
Then, on the line "Percentage interest in the
partnership", enter your percentage.
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 "Labour
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"
and on the left-side column, choose the line "T1 Federal
p3" and on line 12600 enter 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 on 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. In addition, you must enter "$ 0.00"
on the line "Amount of net rental income exempt under
section 87 of the Indian Act" on the "Rental
property income and expenses" page.
Your net rental income will be entered on line 12600 of the
Federal return.
ID: 20191113110115NA.xml
Webpage: KPA320-20191113110115NA.htm
