I have a rental property tax question.
My mom owns and lives in a 3 bedroom house in Toronto. One room is available for rent. My mom is 80 years old and has only OAS+GIS (around $1300/month). I became her power of attorney because of her age. With MY MOM’S CONSENT, can I claim the rent as my own income and I myself will pay tax on that. I also have a full time job and my income tax rate is higher than my mom(so no advantage by switching income receivers). Is it legal for me to claim the rent as my own income? I will file income tax as my own income.
You live elsewhere correct? Is your name on your mom’s house? Only the owner can claim rental income. Most likely since your mom’s only taxable income is OAS, she won’t have any tax to pay on the net rental income. Your concern is probably keeping the GIS. You can figure out the GIS using the TaxCycle program.
Alice, please do not do this. It would be your mother’s rent to report and not yours. There would be trouble for both of you if you do this… Not sure where you got the idea to do this but don’t.
Since what you are proposing could potentially land you in jail, as well as land your mom in jail, it would not be a good idea to do this as stated.
Better to contact your provincial Certified Professional Accountant’s association for a referral to a CPA in your area. Any various legal options should be discussed with professionals in these subjects.
Alice, as @tsolowczuk has said, only an owner, whether legal or beneficial, can claim the income and it sounds like you are neither. I highly recommend you see a tax professional because there are ways to reduce the net taxable rental income so that it might not affect her social benefits.