Rental loss from previous years

GTAresident · Post by **GTAresident** » Sun Nov 29, 2009 2:26 pm

When I was resident, I have a rental loss shown on my previous year return. What happens to this loss now when I have net rental profit this year as a non resident due to low mortgage rates currently.

Can I offset my previous years rental loss when resident against my current year profit this year as a non resident so that I can save on tax on this years income?

Thanks

nelsona · Post by **nelsona** » Sun Nov 29, 2009 3:56 pm

Yes.

As you know you must file a 216 return to determine your final tax. You must however still remit 25% withholding every month to CRA (or a lesser amount determined by them).

GTAresident · Post by **GTAresident** » Sun Nov 29, 2009 4:17 pm

Nelsona- Thanks.
Yes. I am paying 25 % of gross rental as a tax. They have huge penalty for delay in payment as well as interest on unpaid charges is compounded daily.

Worse than credit card companies.

GTAresident · Post by **GTAresident** » Sun Nov 29, 2009 4:45 pm

Hello Nelsona,
Can you please clarify on following?

I have not yet filed NR-6 yet because realtors are not keen on sign up for their increased liability to CRA compared to money they get from me. Therefore I am paying 25 % of gross rent instead of 25 % net rent with NR6.

Can I not file my 2009 return claiming US income during Canada resident duration claiming 401K contribution towards RRSP and 25 % gross rent as advance tax payment?

Thanks

nelsona · Post by **nelsona** » Sun Nov 29, 2009 4:56 pm

Typically the NR6 can only include rental income and expenses, in order to determine the lower withholding rate.

But until you get the NR-6 submitted and sccepted by CRA, you cannot reduce the withholding rate on your own.

As to using your 401(k) as 'equivalent' to RRSP on your 216 return, I do not believe that you can do this. 401(K) contributions are only eligible for use on a Cdn tax return where the US wages are also being reported, that is, if you are Cdn resident. The guide actually specifies that only Cdn RRSP contributions can be included on 216.

nelsona · Post by **nelsona** » Sun Nov 29, 2009 4:58 pm

Nothing that you file on your departure return, can change your 216 return, nor the withholding requirements.

GTAresident · Post by **GTAresident** » Sun Nov 29, 2009 6:00 pm

Hello Nelsona,
I am sorry but I didnot understand your comment.

Can you please elaborate?
Thanks

nelsona · Post by **nelsona** » Sun Nov 29, 2009 8:55 pm

You mentionned something about using information that you will put on your departure return ("claiming US income during Canada resident duration claiming 401K contribution towards RRSP and 25 % gross rent as advance tax payment") towards the 25% renatl tax.

You can't.

As I said earlier, until you get an approved NR-6, you MUST have 25% of the rent forwarded to CRA every month.

GTAresident · Post by **GTAresident** » Sun Nov 29, 2009 9:23 pm

OK.
I have no issues in paying 25 % gross rent as a non resident as long as at the end of the year, future returns process my Canadian future income only and refunds me rest of the advance paid taxes from gross rental tax paid.

Thanks

nelsona · Post by **nelsona** » Mon Nov 30, 2009 7:12 am

Yes. That will be the result of filng your 216 return.

But you really should use NR6, as there is no point having CRA hold all this money for a whole year. Get this in by year-end if you can.