CORRECTION - Canadian Vaction / Investment property

 This answer has just come to my attention.  I have been moving,
etc., and not paying a lot of attention to my email.  In the
answer below I said 30 days when the actual figure is 14 days or
10 % of the rented days.
The practical fact is that if a US person wants to rent out a
vacation property and use it as a tax deduction for anything
other than interest and taxes, they have to rent it more than 140
days to stay in it themselves more than 14 days.
i.e., if you had a Whistler or Vail ski cabin and it was rented
to total strangers (not your brother or sister or kids or the
best man at your wedding) for
100 days, you can stay in it for 14
150 days, you can stay in it for 15
200 days, you can stay in it for 20
250 days, you can stay in it for 25
333 days, you could stay in it for the other 32 days
The rest of the complicated answer dealing with NR-6 forms and NR
4 forms and Section 216(4) returns for Canada is correct.
Thanks to the Accountancy Consultants of New Jersey for pointing
out my error.
david ingram
 -----Original Message-----
From: Accountancy Consultants of New Jersey
[mailto:acnj1 at]
Sent: Monday, July 19, 2004 4:54 AM
To: taxman at
Subject: Re: [Cen-tapede] Canadian Vaction / Investment property
for a US resident - ask an International real estate immigation
and income tax experts expert - David Ingram 's CENTA Services
Group in North Vancouver BC Canada
Isn't the US personal rental days figure 14 days, not 30 days?
centapede at wrote:
  I’m a US citizen, who is interested in buying a
vacation/investment property in downtown Toronto.  Before
pursuing this venture I’m concerned about a couple of things.
What are the US/Canadian tax implications on monies earned from
rental income? The property will be rented 9-10 months of the
year.  Also, are the same rules true for commercial property? Any
light that you can shed would be appreciated.
  david ingram replies:
  I have thirty questions here and only time to answer one.
  For US rules on a vacation property, you can not claim a rental
loss if you use a vacation property more than 30 days OR more
than 10% of the days rented.  Therefore if you only rented it for
230 days, you can only use it yourself for 23 days if you wish to
claim a tax loss.
  Canada does not have such a specific or absolute set of rules.
However, under a new bulletin, if you do not make a profit on a
vacation property that you use personally at all, expect to have
the Canadian CRA "them" deny any losses.
  A commercial property is treated the same for depreciation
purposes in Canada but  in the USA  is depreciated over 31 1/2
years instead of 27.5 years as a residential property would be
dealt with in the USA.
  For the rest, I am giving you the answer to a similar question.
  I am a US citizen living and working in the US.  I am
considering purchasing a rental property in Vancouver, BC and
wondered about the tax consequences--both in Canada and the US.
Would I need to pay taxes on the income in Canada or US?
  david ingram replies
  Both - Canada first on a Section 216 return with an extra
schedule T776 - If any taxes were paid to Canada, you would claim
a credit on your US return by way7 of form 1116.  After
convewrting the Canadian figures to US $$$, youy would have a
small loss, not a profit.
  Would I be able to deduct mortgage payments and condo fees and
management company fees as a business expense?
  You can deduct "mortgage INTEREST" and condo fees and
management fees in Canada and the US.
  If it was to be paid in Canada, would I only be taxed on the
rental income--not my personal US salary income.
  Canada would not have a claim on your US income unless you were
in canada very ofteen on a continuos basis.
  Thank you!
  david ingram replies:
  Before you rent it out, you need to fill out form NR-6 and have
a Canadian "Tax agent" who may or not be the rental agent.
  The NR-6 is available at:
  This will result in the tax agent having to remit $25% of the
net rent to the Canadian Income Tax Department every month.
  Then by March 31st of the following year, your tax agent has to
file form NR-4 and Summary to report the rental income to the CRA
and you.
  The flat form is at:
  The summary form is at
  Then by June 30th, you have to file a Canadian Tax return under
Section 216(4) to report the rental income to Canada on form T776
  You can read the T-1 Guide at
  The T776 will give you a good idea of what is deductible -- It
is analogous to the US form 1040 with a schedule E.
  You can also go to and read the rental income
seciton in the Tax Guide - look around a bit.
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