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T776 Rental summary- US postal code

The client’s property is in US on rent. The address accepts US City and State but postal code format is of Canadian. Cannot enter the postal code and stuck in efiling

Help …

I always just put the correct rental address and then the postal code of their mailing address in Canada. There is no way to put in a US zipcode as far as I am aware.

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Ctrl F2 on the Postal Code cell will let you enter a foreign code.

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That is very sneaky and not at all obvious. I will have to remember that.

@Arliss
Great Tip

@taxcycle
This should be more visible and obvious. Maybe a hover option or a dialog message.

@taxcycle
A USA income reporting mention may be warranted.

A USA holdings valuation mention may be warranted re foreign holdings in excess of $100,000 CAD.

An fx conversion function may be helpful since most foreign rental financials are stated in the foreign currency and then converted into CAD as of the statement date. This is especially true when holding USA vacation or investment property from which rental income is earned and must be reported.

For USA rental income you must also file a US Tax Return.

Which US Return and how you file depends upon many factors:

  • substantial presence in the year
  • days in USA over a number of years
  • Spouse’s USA status - many complex factors
  • ties
  • State tax laws
  • long term USA tax and estate planning consideration
  • and more

There are additional considerations and complexities if you own a share of multi-unit rental complex and earn USA rental income distributions from this share. In the USA this is now considered to be business income and the forms may not be simply the 1040 Alien.

There a lots of great free webinars on this topic at CPA Academy.
https://www.cpaacademy.org/

A small list of resources:

https://ca.rbcwealthmanagement.com/documents/10192/1189349/Selling+or+renting+US+real+estate+Eng.pdf/d129b000-3502-46fa-b605-e0acf066dc28

https://es-cpas.com/us-income-tax/canadians-with-us-rental-properties-taxation-of-us-rental-property-income

https://www.djb.com/2018/06/u-s-tax-compliance-for-canadians-who-own-us-real-property/

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A few years ago, CRA gave instructions to enter the client’s Canadian postal code for rental properties outside Canada. They still require a Canadian postal code for all rental and business statements.

When we added the ability to enter foreign addresses and exchange conversion to the T776 a couple years ago, we also made this postal code switch automatic in the file transmitted through EFILE. You enter the foreign address and when we create the XML file for CRA and see an entry in the country field, we put the client’s home postal code instead of what is entered in the postal code field.

If you right click on the postal code field, the second option is Mask override, which is the mouse version of Ctrl + F2 mentioned above.

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