Rental Property operating at a loss in Canada while working in the US

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jamesz97
Posts: 5
Joined: Thu Feb 20, 2020 1:03 am

Rental Property operating at a loss in Canada while working in the US

Post by jamesz97 »

Hello,

My situation is as follows:

I own a condo in Vancouver, BC but will be working in the US for the next few years. Since I am working in the US, I will be taxed on worldwide income. However, my costs (mortgage, insurance, HOA fees, property manager) exceed my rental income.

1. I'm wondering how the US will be taxing me? Will they consider how I'm actually losing money and won't tax me on my rental income?

Thanks
Ron.Henderson
Posts: 81
Joined: Sun Jan 06, 2019 2:24 pm

Re: Rental Property operating at a loss in Canada while working in the US

Post by Ron.Henderson »

If the rental is losing money, there is no rental income to tax. (The rent paid is revenue, not income.)

Whether you could use the rental loss to reduce your US tax bill is another question.
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Rental Property operating at a loss in Canada while working in the US

Post by nelsona »

First, you are not taxed n world income in Canada if you no longer live there. You should be filing a departure return.
Second, since you are no longer resident, you are responsible for 25% MONTHLY tax on GROSS renatl income, unless and until you get approval from CRA to reduce this to the net amount.
CRA explains this clearly on their website.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
jamesz97
Posts: 5
Joined: Thu Feb 20, 2020 1:03 am

Re: Rental Property operating at a loss in Canada while working in the US

Post by jamesz97 »

Hi Nelsona,

1. Yes you are correct. What I mean by taxed on worldwide income is on the USA side. They could be taxing my rental income from Canada.
2. Yes, I am aware of the 25% of the gross rental income. I will need to file the NR6 and NR4 to reduce this to the net amount.
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Rental Property operating at a loss in Canada while working in the US

Post by nelsona »

It's an NR6.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
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