Should I file my renting income (a condo in China) under foreign income or renting income?

[zo mohammady]

You will need to report three things:

1.    Rental Income

2.    Foreign Tax Paid on Rental Income, and

3.    Foreign Property Information Reporting on the T1135

Foreign Rental Income

First, complete the T776 Statement of Real Estate Rentals.

1.    Using the navigate menu up top, select Income > Rental Property

2.    Enter all relevant fields in the T776

NOTE: CRA will not allow you to file your return using NETFILE if the rental address doesn’t have a Canadian province and postal code entered.

As a workaround, we suggest that you enter the foreign address on the “Address” lines, and the foreign city and country in the “City” field. Finally, input your residential province and postal code in the corresponding province and postal code fields.

Foreign Tax Credit

1.    Select Find in the top right hand corner

2.    Type "foreign" and select Foreign Tax Credit

3.    Select Yes to the Foreign Taxes page. 

4.    Enter the country your foreign property is located

5.    In the section “Foreign real property income:”, enter the gross rental income amount, related expenses and the amount of foreign taxes you paid.

NOTE: The amount of income entered on the Foreign Tax Credit form will not add additional income to your return. It is needed, however, to properly calculate the foreign tax credit for the country you specified.

T1135

1.    Using the navigate menu up top, select Income > Other Income Sources > T1135

2.    Follow the prompts on the screen. 

NOTE: The T1135 is information reporting only. We recommend choosing the simplified method if your assets are over $100K but under $250K.

Again, you will need to enter the income corresponding to each of your foreign property. Income entered on the T1135 will not affect your income tax return.

Lastly, the T1135 needs to be filed separately from your income tax return. When you are ready to file, you will see an additional button to file your T1135 using CRA’s NETFILE service.

You can also use following link :

How do I enter foreign rental income in TurboTax?

Also  you can read details on Tax treaty by going through this CRA link:

Agreement Between the Government of Canada and the Government of the People's Republic of China

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