I recently purchased a rental property in Canada and I’ve educated myself on all of the non-resident requirements on this forum (Canadian agent, 25% withholding, NR6, NR4 slip, S.216 return etc). Great info by the way!
I purchased the property in January and my tenant will start renting it in May. I would like to get the form approved before May so I can withhold on a net basis. I’m in the process of completing the NR6 form and I’m confused about one part.
The form is asking me to estimate my expenses “for the yearâ€. Because this is a partial year, do I just estimate my expenses for the remaining months of the year (May-Dec) or do I still estimate 12 months? This will have a pretty big impact on my cash flow depending on which way I have to do it. Anyone have any experience with this?
NR6 Form Partial Year
Moderator: Mark T Serbinski CA CPA
NR6's are taking forever to process -- it won't be processed by May in any event.
Just do the form with yearly amounts, and it will eventually get approved. it is never going to be 100% accurate (unless you operate at a loss and have 0% withheld) and you have to file a 216 at year-end anyway.
But, really, It wouldn't matter if you did it even on a monthly basis. All NR6 is doing is figuring your monthly net income, and you will have 25% of that net witheld on a monthly basis.
If you are making $10K in 6 months, or 20K in 12-months, the NR6 will come back with the same withholding rate.
Just do the form with yearly amounts, and it will eventually get approved. it is never going to be 100% accurate (unless you operate at a loss and have 0% withheld) and you have to file a 216 at year-end anyway.
But, really, It wouldn't matter if you did it even on a monthly basis. All NR6 is doing is figuring your monthly net income, and you will have 25% of that net witheld on a monthly basis.
If you are making $10K in 6 months, or 20K in 12-months, the NR6 will come back with the same withholding rate.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
Ok thanks for this info, I will get the NR6 done ASAP to improve my chances of getting it approved on time. Yes I assume the math is the same; I just didn’t know if CRA wanted to see one full year or a partial year on the form. As you say, it will all reconcile when you file the return anyway.
If my estimates are off by a lot from year to year, is CRA going to give me a hard time about trying to apply to file on a net basis in the future, or are they pretty lenient with this?
Also, my brother is a Canadian resident and Agent for another family member of ours with a rental property and he’s going to be my Agent as well. Do you know if he can just use the same non-resident withholding account for me, or does he have to set up a separate one?
Thanks.
If my estimates are off by a lot from year to year, is CRA going to give me a hard time about trying to apply to file on a net basis in the future, or are they pretty lenient with this?
Also, my brother is a Canadian resident and Agent for another family member of ours with a rental property and he’s going to be my Agent as well. Do you know if he can just use the same non-resident withholding account for me, or does he have to set up a separate one?
Thanks.