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Frequently Asked Questions. How does the Canada Revenue Agency (CRA) know about rental income? The CRA obtains information about rental income through various means, such as data matching with property records and information received from third parties, including banks and financial institutions.
The person who owns the rental property has to report the rental income or loss. If you are a co-owner of the rental property, your share of the rental income or loss will depend on your share of ownership. Report the rental income the same way for each year you own that rental property.
The tax rate on rental income in Canada is the same as your marginal tax rate (the tax rate you pay on your next dollar of income), since your net rental income would be in addition to your other sources of income (such as your salary, business income and investment income).
You may also claim your rent if you are self-employed or if you are allowed to claim employment expenses (i.e., you have a signed T2200 from your employer). In this case, enter your rent as an Other Expense where you claim your use-of-home expenses.
The amount someone pays you to use your property, after you subtract the expenses you have for the property. Royalty income includes any payments you get from a patent, a copyright, or some natural resource that you own. For more information, see IRS Publication 17, chapter 9.
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Form T776 will help you calculate your rental income and expenses for income tax purposes. Even though we accept other types of financial statements, we encourage you to use Form T776. To calculate your rental income or loss as well as your capital cost allowance (CCA), complete the areas of the form that apply to you.

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