Claiming medical, disability by NR Canadian Selling Rental Property

[redbeer]

Hi all,

Can a NR Canadian living in U.S. claim any of medical expenses, disability, infirmity or caregiver amounts on a T1-NR or Section 216 return when reporting sale of rental property?

These do appear to be selectable in the Ufile software but entered amounts do not seem to take any effect.

Many thanks.

[nelsona]

No. The 216 return has no provision for lowering taxes other than RRSP contributions, FHSA contributions or some legal fees.

216 is designed to determine taxation of rental income and expenses only.

If you have other income in Canada that would be reportable on a non-resident return (including a 217 return), you would claim medical expenses on that return

[nelsona]

216 election is reported on form T1159, which is VERY SHORT.

[redbeer]

Thank you nelsona.
I do have capital gains and interest and went to do T1 for Non-residents in UFile.
But as I entered medical expenses (which are more than 3% of net income), they seem to be ignored. Wondering if it is a software issue or there is some other criteria in effect.

[nelsona]

What capital gains and interest could you be including? Interest is tax-free for non-residents, and cap gains (except for selling Cdn real estate) are not taxable in Canada for US residents.

Just file your 216.

[redbeer]

Capital gain is indeed for a sale of Canadian real estate.
And thank you for the note on interest, I got an NR4 and I will be reporting that on a US return.

[nelsona]

Then you can claim medical expenses on the NR return, but since you are not reporting world income, your deductions may be limited.

If it is not working with the software you are using, contact them.

[redbeer]

Yes, I found that the limitation for medical expenses is the 90% rule, they can be claimed if Canadian-sourced income is at least 90% of the world income.