Skip to main content
March 3, 2023
Question

I earn about $ 10,000 a year net in rental income in Germany. This is net and after payment of German income tax. How do I enter this and where?

  • March 3, 2023
  • 1 reply
  • 0 views
No text available

    1 reply

    March 6, 2023

    To benefit from all possible credits and deductions on your foreign rental income, follow the instructions below to enter that income into TurboTax and claim any applicable foreign tax credits. Before starting, fill out your personal information and tax profile to ensure optimal results.

    If you owned or held foreign property during the year with a total cost of over $100,000 CAD, you must also complete Form T1135. This property includes bank accounts, stocks, bonds, and real estate.

    Instructions for TurboTax Online

    Note: All amounts entered into TurboTax should first be converted to Canadian dollars. The CRA will accept the Bank of Canada exchange rate in effect on the day you received the income.

    1. From the menu, select Find and enter rental in the search field
    2. Select Rental properties from the results, then select Go
    3. Select Yes to Did you receive income from a rental property?
    4. Proceed until the Real Estate Rentals Statement screen. Enter your information, then select Continue
    5. On the Rental Profile screen, select the checkboxes for Rental Income and Rental Expenses, then select Continue
    6. On the T776 Rental Income screen, enter as much of the foreign address as possible, including the postal code equivalent. However, enter your home province and postal code in the Province and Postal code fields
    7. On the same screen, enter your gross rental income, then select Continue
    8. Enter your rental expenses on the screens that follow, selecting Continue as you finish each screen
    9. On the Here's your capital cost allowance for your assets screen, select Done
    10. On the Rental Summary screen, select Done With Rental Income
    11. From the menu, select Find and enter foreign tax in the search field
    12. Select Foreign Tax Credit from the results, then select Go
    13. Select Yes to Do you want to determine how much you can recover?
    14. On the Foreign Tax Credits screen, enter the name of the foreign country, then enter your amounts for Foreign real property income, Deductions from foreign real property income (if applicable), and Foreign tax paid on real property income
    15. When you’re finished, select Continue
    16. On the Foreign Taxes Summary screen, select Continue
    17. You’ve now entered your foreign rental income and claimed any applicable foreign tax credits

    Important: Don’t enter your foreign rental income on the Foreign slip screen, as this will duplicate the amounts that you’ll enter using the steps below.

    Instructions for TurboTax CD/Download

    Note: All amounts entered into TurboTax should first be converted to Canadian dollars. The CRA accepts the Bank of Canada exchange rate in effect on the day you received the income.

    1. From the menu, select Find and enter rental in the search field 
    2. Select Rental property from the results, then select Go
    3. Select Yes to Did you receive income from a rental property?
    4. Proceed until the Real Estate Rentals Statement #1 screen. Enter your information, then select Continue
    5. On the Rental Profile #1 screen, select the checkboxes for Rental Income and Rental Expenses, then select Continue
    6. On the T776 Rental Income screen, enter as much of the foreign address as possible, including the postal code equivalent. However, enter your home province and postal code in the Province and Postal code fields
    7. On the same screen, enter your gross rental income, then select Continue
    8. Enter your rental expenses, then select Done With Expenses
    9. On the Multiple Rental Activities screen, select Yes if you need to enter another Real Estate Rentals Statement. Otherwise, select No
    10. On the Rental summary screen, select Done With Rental Income
    11. Switch to Forms mode by selecting Forms from the menu
    12. Select View from the toolbar, then select Find Form…
    13. In the Keyword to search for field, enter FTC
    14. Select Foreign Tax Credits Worksheet, then OK
    15. In the Foreign Non-Business Income section, select the field for Real property income in the applicable column. Press F2 on your keyboard and select Yes in the pop-up window to override. Enter your net foreign rental income, then press Enter on your keyboard
    16. On the same screen but in the Foreign Non-Business Tax section, select the field for Real property income in the applicable column. Press F2 on your keyboard and select Yes in the pop-up window to override. Enter the amount of foreign tax paid on your rental income, then press Enter on your keyboard
    17. You’ve now entered your foreign rental income and claimed any applicable foreign tax credit(s)

    Important: Completing these steps will require you to print and file your return, rather than NETFILE.

     

    Thank you for choosing TurboTax.