# Rental Property Income Splitting (hubby screwed it up...)



## econerly (Nov 15, 2013)

Hello,

My husband has been doing our personal income tax preparation since I am from the States and originally did not have any income to report; once I became a permanent resident and got a job in 2006, he continued to prepare our statements because he was already familiar with the process. This year, I decided to get involved, and am realizing he's made a bit of a mess regarding our rental property income.

The backstory:
We purchased our first duplex in 2005, using gifts from my parents for most of the down payment. Since I had no Canadian credit history, he was listed solely on the mortgage and ownership papers. We lived 
÷
We purchased our second income property (split residential and commercial) in 2010, using personal savings and a HELOC on our first property for the down payment (mortgage and title in both our names). The building has needed a lot of work, the operating costs are high, and it is not yet fully rented, so it has always shown a loss.

The tax history:
My husband initially allocated all the income from the duplex to himself, since I had no official presence in Canada. Once I became a permanent resident and got a job, he switched all the income to me, since I made less than him. When we bought the second property, he reported all the losses on his statement, and kept the duplex income on mine.

Obviously, there is a lot that is wrong here, but my question now is how to fix it?

Could someone please explain how the income (loss) *should* have been reported to begin with, and now what to do to fix it?

Thanks!!


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## MoneyGal (Apr 24, 2009)

In general terms, how you fix it is by amending the tax returns for 2006 onwards. Amending is a very straightforward process. 

Income/losses from a property owned solely by one spouse are reported on the tax return for that spouse. 

Income/losses from a property owned jointly are reported on the tax returns for both owners in proportion to their ownership share. 

Given that you are unsure how to proceed, and you are fixing errors on your husband's part, I suggest you see a tax professional who can prepare the requests to amend all the returns.


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