# Rental Income



## tygrus (Mar 13, 2012)

If I understand this, if I buy rental properties through a corporation, then the rental income is taxed at a high rate. What if this is just flowed right out of the corporation to the shareholders? Can it get any lower that way?

And someone mentioned that if you provide business services to your renters, then it could qualify as an active business. What would those be?


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## marina628 (Dec 14, 2010)

Collecting rent is not providing a service to the tenants .You can do their taxes for a fee which would be an active business but you still have passive income from the rental income.


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## MoneyGal (Apr 24, 2009)

Marina - the issue is that a landlord who provides services (not tax preparation or "business services," think laundry, meals and mail) can potentially choose to have the income from the rental and related services treated as business income, not income from property. See http://www.taxtips.ca/realestate/rentalorbusiness.htm


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## Cal (Jun 17, 2009)

I think the OP should consult with an accountant prior to starting to buy investment properties so they realize the ramifications of how they run/structure their business.


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## marina628 (Dec 14, 2010)

There are many factors to consider when you are buying and also you need to make a plan for selling and dealing with the Eventual capital gains.


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## Berubeland (Sep 6, 2009)

I'm thinking a care home or seniors home might qualify as that kind of exemption.


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