Paying taxes to US on CDN rental income - TN Visa

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yeroppi
Posts: 2
Joined: Wed Mar 29, 2017 10:22 am
Location: Boston, MA

Paying taxes to US on CDN rental income - TN Visa

Post by yeroppi »

Hi, I hope someone can help me with this!
I am a TN-Visa holder who has resided in the US for the full year of 2016. (Non-resident Canadian). I have received rental income from my Canadian property during 2016 and now trying to figure out how to file it.

US taxes:
- I believe I have to file the income under the Schedule E form?

CDN taxes:
- a special non-resident form; I know that I will be taxes 25% of the gross rental income as a non-resident

Since I'm already paying CDN taxes on the rental income, how do I adjust the US reporting to account for the amount I've already taxed. My presumption is that I wouldnt' be double taxed on the rental income? Is that correct? Or does the US receive taxes on the same full gross rental income?

My subsequent question is: can I claim my mortgage interest on the rental property in my US taxes?

Thanks for any help!!
Kristy
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

First, as a non-resident of Canada, you MUST be having your rental income withheld 25% and remitted to CRA monthly. Failure to do this results in interest an penalties. Then, as you say, you file a 216 return in Canada reporting only this income, and the expenses, and pay roughly 25% tax on the NET rental income.

For US, the reportin gof the income is no different than if the property was in US, you report it as renatl income, bith income and expenses, and determine tax accordingly. Then, you use form 1116 to get credit for the Cdn tax you calculated on your 216 return.

The same principal applies to any Cdn income you might be taxed on in Canada. You report it on your US return, and then take credit for any Cdn tax.

Mortgage interest is a rental expense in US and Canada. One thing to remember, that you MUST depreciate on your US rental income report, while you can choose to do so in Canada. It usually best to do it on both.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
yeroppi
Posts: 2
Joined: Wed Mar 29, 2017 10:22 am
Location: Boston, MA

Post by yeroppi »

Thanks so much for all the help!
Kristy
Carasad
Posts: 17
Joined: Tue Dec 07, 2021 6:06 pm

Re: Paying taxes to US on CDN rental income - TN Visa

Post by Carasad »

I really want to go buy a house for my wife and me. But I am a total newcomer to this topic. I have been doing some reading on the topic, but I am still unsure. I have also found a good mortgage advisor company Mortgage Advice Newcastle (https://Newcastlemoneyman.com). They have helped my good friend to buy a good house in a village. But I still think that I have to understand the whole process myself.
What resources would you suggest I read on the topic? What part of my income ($80k/year) can I spend on the mortgage and still have some money to eat?
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