Rental income tax question.
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Thread: Rental income tax question.

  1. #1
    Join Date
    Jul 2016
    West Coastin

    Rental income tax question.

    I'm looking to buy a rental property.

    I'm wondering if I should put the property title and rent income into her name because she has a much smaller regular income at her day job (almost nothing) and how that would affect the tax situation.

    I am a bit hesitant to do this because she is a US citizen (dual) and it might turn into a complicated mess.

  2. #2
    Senior Member
    Join Date
    Jun 2009
    Okanagan Valley
    CRA will not allow that (would be 'tax evasion'). If it is your money that purchases the property, you have to declare the income. The concept is called 'attribution of income'. Now you could do a 'spousal loan' in which you loan her the funds at the CRA prescribed interest rate (the income of which is taxable in your hands and tax deductible to her). She then pays all the expenses, including mortgage, and declares the rental inome. It is important to do this right.

    That said, she will have to report her worldwide income to Uncle Sam...the taxes of which "should" all be recoverable as a foreign tax credit on her Canadian tax return....but I don't know the vagarities of differences of US income tax law vs Canadian income tax law for investment real estate. Bottom line: You have a lot more to investigate, including an accountant's advice, before proceeding.

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