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Saturday, April 11, 2015

Married Non-Resident Canadian Couple Reporting U.S. Rental Income on 1040NR

Splitting U.S. Rental Income Between Spouses
If a Canadian couple buy a house in the U.S. and decide to rent it out, how are taxes filed? There are a few different ways to look at this. You have a few options and should choose what works best for your situation.


2. Determine what filing method will be most beneficial

3. File seperate 1040NR's and split amounts on Schedule E's

1. Read Taxes for Canadians with U.S. Rental Property.

Read the article first to get a better understanding of taxation as landlords in the U.S.

2. Determine the most beneficial filing method
A) File one return and claim spouse

As a non-resident alien, you will have to file a 1040NR. Unfortunately, you cannot file as married filing jointly. You can file one return and claim your spouse as a dependent IF your spouse had no income for the tax year connected to the U.S. and they cannot be claimed as a dependent on anyone else's return.
Just because you are both on title to the property recieving rental income does not necessarily mean that you should claim the rental income under both of you.

b) 3. File Seperate 1040NR's and split amounts on Schedule E's

If you'd like to show that both you and your spouse are making U.S. income equally from your rental property, you will need to file seperate 1040NR's and split the Schedule E amounts. This can be done as tenants in common.
Regardless of your situation, if you own a rental property in the U.S. as a Canadian, give us a call.
Borders Bookkeeping
(760) 895-3516