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. On the "Left side menu of the Interview tab", select
"Interview setup".
2. On the right-hand side of the screen, go to the "Rental
income" group, check the boxes for "Rental property
income" and click "Next" at the bottom of the page.
3. On the "Left side menu of the Interview tab", select
"Rental property Income" and on the right-hand side, choose
"T776 - Rental income property".
4. Since the building is located outside of Canada, you have 3
choices.
A) On page "T776 - Rental Property
Identification". You can leave the "Address of your rental
property" blank, and the program will use your home address of
Canada and you may submit your return via NETFILE.
B) Your second choice, which we
favor, in the section "Address of your rental property"
you indicate the civic number of the foreign property on the line
"Street" and the line "City" you enter the city and
state and the country. However, you indicate your province
of Canadian residence and your Canadian postal code. You will
be able to send by NETFILE.
C) If you enter the full address of the
property in the country where your property is located, you will
not be able to submit your return by NETFILE, and then you must
mail it to Revenue Canada.
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", "Motor vehicle
expenses", "Partners" and "CCA" 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 "Left side menu on the Interview tab",
select "Interview setup".
2. On the right-hand side of the screen, go to the
"Investment income and expenses" group, check the boxes for
"Foreign income or foreign property (T1135)" and click
"Next" at the bottom of the page.
3. Select "Foreign income & property" and in the
screen to your right, go to the group "Forein non-business
income" click
the plus sign "+" icon
to the right of the line "Foreign rental income".
4. On the page entitled "Foreign income - rental", if you
have foreign taxes paid on foreign rental income that you reported
as rental income, enter the net business income on the line
"Foreign rental income entered as business income". If
applicable, enter the "Amount of foreign tax paid" on this
rental income and click "Next" at the bottom of the
page.
Form T2209 will be produced by the program and the
program will tell you if you are eligible for the federal foreign
tax credit. While for residents of Quebec, form
TP-772 will be generated by the program and will show you
on line 49 the foreign tax credit.
The foreign tax credit will be carried forward by the program
to line 40500 of the federal return and line 409
of Schedule E of Quebec, Foreign Tax Credit. In addition, the
program will generate federal form T776 - Statement of Real
Estate Rentals, as well as form TP-128 - Income and
Expenses Respecting the Rental of Immovable Property.
For more information, please consult the following link:
https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/rental-income-non-resident-tax.html
Remember, if your foreign property has a
value above $100,000 CAN, do not forget to indicate at
"CRA questions" and complete the "T1135 Foreign Income
Verification Statement".
ID: 20210721113410NA.xml
Webpage: KPA360-20210721113410NA.htm
