2

All I can find is the following, but it is for USA.

https://ttlc.intuit.com/community/investments-and-rental-properties/discussion/no-is-the-brief-answer-generally-each-of-you-would-rep/01/159513/highlight/true#M6051

Generally, each of you would report your proportional share of the rent income and rent expenses on your individual income tax returns.

However, a written agreement may have a different % allocation [ownership basis is not affected] if one co-tenant owner does not wish to actively participate in the selection of tenants and managing the property. A written agreement is also helpful if ever audited.

Although individual state laws may differ, as far as your federal return goes, the rent could be shared in varying proportions calculated to produce the maximum tax advantage for each owner, especially if one owner is a higher rate taxpayer and the other a non- or basic rate taxpayer.

In the states, one co-owner can freely adjust the rental income percentage for tax purposes, without it affecting ownership basis. As long as consent is to be had with all the owners. I assume this

Just wondering if it works the same in Canada Ontario? Thanks.

What about capital gain when the property is sold. Is the capital gain always calculated 50/50 in a joint tenancy?

1
  • Side note to your question - fundamentally the US has near-perfect "income splitting" between married persons, meaning a couple where one spouse makes 70k and one spouse makes 30k typically pays the exact amount of tax owed by a 2 spouses who make 50k each. Canada has very limited income splitting potential - in fact, there is often 'punative anti-splitting', where only the lower-earning spouse can claim some deductions, etc. This is an example of how different the systems are; be very very careful about assuming Canadian tax rules from American counterpart rules. Apr 29 at 13:21
1

The CRA is unusually clear on this:

if you own a rental property with your spouse or common-law partner, you are a co-owner.

Not "you may be" or "consider electing to be" -- you are.

Be careful as you fill out the form, because you're mostly working with the total rent and total expenses, not divided by owner, until you get to the final number.

1
  • The last line is key - you don't even have the ability to mechanically apportion your 'share' in a rental asset's expenses on your personal tax return, until you declare your ownership % for net rental income [which needs to tie to your legal right to that % of the underlying asset]. Apr 29 at 13:18

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.