As per my understanding the rental income is reported on T776 as per the title. I have been doing this all the time.
The property in question is 50% on each spouse
The lower income spouse is wife and they have been reporting the income under wife. Wife explains that all the money was invested by her, she looks after the property, tenants etc
My question is can the rental income be put in wife’s return. Can it be a different proportion than 50%
Does it matter who contributes the funds and who pays the mortgage instalments
Any help will be appreciated
“Can it be put on her return?” is a different question than “Should it be put on her return?”.
Title and income reporting may be quite different. Title goes to a civil issue of rights and ownership. Tax and “beneficial interest” can become a much more complex issue. Technically, the income follows the provider of the funds…typically. But not always.
And I don’t always believe clients when they tell me that a spouse who has no history of income, no inheritances and no evidence of funding was the sole investor. (Not saying this is your case…but it definitely happens.) Facts matter.
My understanding, although limited, would be attribution rules regarding the investment along with not being allowed to change ownership percentage to take advantage of tax rules. Please look at this article…
Thank you. It helps. In fact, I read a few articles after posting and it was similar to you your opinion is. The client also confirmed that it was her inheritance. So, I put it it her income.
Thank you so much
Yes, facts matter. CRA certainly has the ability to ascertain what funds a taxpayer might have available to invest, and the power to say “Prove it, or here is your assessment”
