You can own a rental property by yourself or in partnership with other owners.
Most of the time, if you own the rental property with one or more persons, we consider you to be a co-owner. For example, if you own a rental property with your spouse or common-law partner, you are a co-owner.
In some cases, if you are a co-owner, you have to determine if a partnership exists.
Partner in a Partnership
A partnership is a relationship between two or more people carrying on a business, with or without a written agreement, to make a profit. If there is no business in common, there is no partnership.
That is, co-ownership of a rental property as an investment does not make a partnership. To help you determine if you are in a partnership, see the partnership law for your province or territory. For more information, go to Income Tax Folio S4-F16-C1, What is a Partnership?
Your share of the partnership income
A partnership that carries on a business in Canada, or a Canadian partnership with Canadian or foreign operations or investments, has to file a T5013 slip, Partnership Information Return, for its fiscal period if either of the following occur:
- at the end of the fiscal period, the partnership has an absolute value of revenues plus an absolute value of expenses of more than $2 million, or has more than $5 million in assets
- at any time during the fiscal period:
- the partnership is a tiered partnership (has another partnership as a partner or is itself a partner in another partnership)
- the partnership has a corporation or a trust as a partner, or
- the partnership invested in flow-through shares of a principal-business corporation that incurred Canadian resource expenses and renounced those expenses to the partnership, or
- the minister of national revenue requests one in writing
If you are a partner in any of these types of partnerships, the partnership has to give you two copies of a T5013 slip, to file with your income tax and benefit return. For more information on this return, go to Sole proprietorships and partnerships or see the T4068, Guide for the Partnership Information Return (T5013 Forms).
If you determine that you are a partner of a partnership and you received a T5013 slip, fill in only the following fields on Form T776:
- enter your nine-digit Partnership Business Number
- enter you rental property ownership percentage in the "Percentage of ownership" box
- enter the amount from box 110 (or 107 if it is a limited partnership) of your T5013 slip at amount 10
If you are a partner in a partnership and you do not receive a T5013 slip, or if you are a co-owner, fill in all of the areas of Form T776 that apply to you. Follow the special instructions to complete lines 8299, 9369, 9936, 9943 and 9946. If you are such a partner or co-owner, make sure you complete the "Details of other co-owners and partners" area on Form T776.
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