Do I have to report rental income from my USA rental property?

Yes, for Canadian tax purposes you have to report your rental income and expenses on your Canadian tax return. For USA tax purposes, assuming this is your only USA source income, there are two options.

Option 1, is that your tenants withhold a 30% flat tax on the gross rental income they pay and you would not have to file a USA tax return because your obligation is met through the payment of the withholding tax.

Option 2, is that you report the rental revenue and expenses on a USA tax return and pay tax on the net income at USA tax rates. The USA federal tax rates for “single” or “married file separate” tax payers are: 25% on taxable income from $37K to $90K; and 28% from $90K to $189K.

There are additional steps required under both options. It is likely, that if both you and your spouse are on title; then two USA tax returns and dual CDN reporting is required.

 © - Jacob Rawski, 2015

Back to listing of articles

Head office:

Elm Business Park, Building #1,

201-9488-51 Avenue, Edmonton, Alberta, T6E 5A6

Telephone: 780-761-1115

info@rawski.ca