My wife and I have a rental property since 2013.
The ownership, mortgage and lease agreement is both in mine and her name.
Throughout these years, our income tax preparer has been claiming the rental property only under my name instead of splitting it 50/50 between my wife and me.
This year I have decided to use TurboTax premier to do my own taxes and did some online research to learn that it should have been split evenly between the two of us.
Is it ok for me to claim the expenses/profit as a co-ownership between me and my wife? Will this set up any red flags with service Canada?
It's hard to say if this could cause an inquiry by CRA, but often times CRA will take into consideration your decision to correct the matter and consider it a "voluntary disclosure". It's quite possible that you paid more taxes in the past by having all the income reported on your return, so they likely wouldn't require you to make any adjustments to the previous years.
If both of you own the property 50/50 - it should be split 50/50. You cannot change the percentages just to lower one spouse's tax liability (IE: report all the income on the lower income earner). If you BOTH own it and change the ownership percentage this could cause a red flag with CRA.
Here's an excerpt from the CRA Rental Guide:
Who reports the rental income or loss?
The person who owns the rental property has to report the rental income or loss. If you are a co-owner of the rental property, your share of the rental income or loss will depend on your share of ownership.
Report the rental income the same way for each year you own that rental property. In other words, you cannot change the percentage of the rental income or loss you report each year unless the percentage of your ownership in the property changes.
There is a wealth of info in the CRA Rental Guide. Here is the link: https://bit.ly/2JwR5pH
How do you get turbotax to automatically fill in the co-owner's information? I have set the percentages to 50% each