# house owned by 3 people, does the rental income have to be declared by all 3 equally?



## klatwork (Jan 16, 2014)

me, dad and sister owns the house...we live together and share the money together...
can we just file it under one person's tax return or need to declare rental income under all 3 of our returns?
thanks


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## nobleea (Oct 11, 2013)

I believe you each enter in all the income and expenses for the rental, then there's a box to enter your percentage and the tax software does the rest. If you're all on the title (and the mortgage), and you have some agreement as to the percentages each person owns, then I would split everything accordingly. This also comes in to play if you ever sell the house and have to calculate and pay capital gains.

I don't know how it would work when all three are on the title, but the mortgage is only in one name.


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## Guban (Jul 5, 2011)

+1
You need to declare the income based on a weighted share of who paid for the house.


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## Zeeshanbmerchant (Jan 4, 2014)

nobleea said:


> I believe you each enter in all the income and expenses for the rental, then there's a box to enter your percentage and the tax software does the rest. If you're all on the title (and the mortgage), and you have some agreement as to the percentages each person owns, then I would split everything accordingly. This also comes in to play if you ever sell the house and have to calculate and pay capital gains.
> 
> I don't know how it would work when all three are on the title, but the mortgage is only in one name.


Can all three have the house as their principle residence?


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## klatwork (Jan 16, 2014)

so for example, if i claim my sis has 90%, me and my dad 5% each...that's ok?
or we have to evidence to back up my claims?:distress:


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## topgun3 (Jan 18, 2014)

Interesting scenario....what if 3 people owned the house equally, but 1 person decided to rent out their share. Would only 1 person claim the rent or would it have to be split equally?


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## Guban (Jul 5, 2011)

Zeeshanbmerchant said:


> Can all three have the house as their principle residence?


Yes they can, but they have to live there. There are restrictions when it is rented out too. They can't make major modifications, can't claim CCA and only rent out a minority of the place, as I recall.


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## Guban (Jul 5, 2011)

klatwork said:


> so for example, if i claim my sis has 90%, me and my dad 5% each...that's ok?
> or we have to evidence to back up my claims?:distress:


Yes to both.


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## Guban (Jul 5, 2011)

topgun3 said:


> Interesting scenario....what if 3 people owned the house equally, but 1 person decided to rent out their share. Would only 1 person claim the rent or would it have to be split equally?


Only one person is renting it out, so only that person should claim the income. The others would be living there, or otherwise using the place right?


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## OhGreatGuru (May 24, 2009)

I don't see how only one person can rent it out. The house is owned in common by 3 people, in proportion to the equity they put into it.


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## nobleea (Oct 11, 2013)

OhGreatGuru said:


> I don't see how only one person can rent it out. The house is owned in common by 3 people, in proportion to the equity they put into it.


Right.
They own the house as a whole. Not 1 of the three bedrooms or one floor each. One or two people could be living there as the primary residence, but would only get the free capital gains on the percentage of the house that is not being rented out. And the rent and expenses would be split as per the ownership amounts. So in the case of a bungalow with the basement being rented out and brother and sister living upstairs. Both dad, brother and sis would have to claim the rent income and expenses as per their ownership percentage on their taxes. When the house is sold, all would have to pay the capital gains on the basement suite that was rented out (50% in a bungalow). Bro and sis would have to pay no cap gains on the main floor (their primary residence) but dad would have to pay cap gains on his proportion of the entire house (not his primary residence).


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## Guban (Jul 5, 2011)

That's not necessarily how the capital gains taxes are applied.
See http://www.theglobeandmail.com/glob...es-rent-out-part-of-your-home/article4544160/


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## OhGreatGuru (May 24, 2009)

True, CRA's rules are a little more complex than we have made out. There are some exemptions that can be applied. But the article you refer to is based on the simple case of an owner-occupied principle residence. The OP tells us there are multiple owners, one of whom may no longer be resident.


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