Canadian Renting their U.S. timeshare

[BM243923]

I rented out my lock out unit in Florida for the first time this year. The resort rented it for me. They took 25% off so my portion was almost the amount I had paid in Maintenance fee the whole unit.

When they paid me my portion off the rental they deducted 30% tax. The tax took a big chunk of the money.

How do I get this back?

Thanks

 

[vacationhopeful]

So the next question is, did the resort get YOU more money than you would have if you rented it on TUG or thru another WEB site?

You can reply via PM ... as I too own at that resort.

 

[SmithOp]

You will need to file a non-resident tax return to get the withheld tax back, possibly a state NR also if state tax was withheld.

https://www.irs.gov/uac/Form-1040NR,-U.S.-Nonresident-Alien-Income-Tax-Return


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[bizaro86]

Alternatively, you can claim it as a credit on your Canadian taxes under the US/Canada tax treaty.

 

[BM243923]

Bizaro86

Have you ever had to do this?

Did you rent a timeshare in the U.S. and pay U.S tax deduction?

Thanks

 

[bizaro86]

Bizaro86

Have you ever had to do this?

Did you rent a timeshare in the U.S. and pay U.S tax deduction?

Thanks

No, but I have claimed the foreign tax credit on my Canadian return for income I earned from US sources that had taxes withheld on it.

More information directly from the CRA here: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns409-485/405-eng.html

Essentially, you would need to claim any income earned from the rental on your Canadian return, (which might not be much after maintenance fees) and then you can claim the US tax paid as a credit, which should reduce your taxes paid by the same amount.

You have to fill out form T2209, but any of the regular tax software (or your accountant) can easily do that.

**Not an accountant, and this isn't professional advice**

 

[BM243923]

Thanks, that is a big help.

I know I have stock that is listed on the New York Stock exchange, and I had to do something similar.

Thanks again

 

[mindface]

Alternatively, you can claim it as a credit on your Canadian taxes under the US/Canada tax treaty.

Really good to know that trick, as it may be easiest solution (avoiding IRS all together). But, since owner's rental income barely covers MF, shouldn't owner tried to get the money back from IRS, instead of having CRA crediting owner back?

Anyhow, seems we shall just use all the weeks we have ourselves at the 1st place...

 

[bizaro86]

Really good to know that trick, as it may be easiest solution (avoiding IRS all together). But, since owner's rental income barely covers MF, shouldn't owner tried to get the money back from IRS, instead of having CRA crediting owner back?

Anyhow, seems we shall just use all the weeks we have ourselves at the 1st place...

I would say since the total tax paid remains the same and one option is materially less work, "should" is a matter of opinion.

I'm not sure how much time I'd spend to ensure a few hundred dollars got transferred (effectively) from the US govt to the Canadian govt, but it wouldn't be much. YMMV.

 

[John Cummings]

You will need to file a non-resident tax return to get the withheld tax back, possibly a state NR also if state tax was withheld.

https://www.irs.gov/uac/Form-1040NR,-U.S.-Nonresident-Alien-Income-Tax-Return


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There is no state income tax in Florida.

 

[Quinte]

This is just the question I wanted to ask. How did it work out for you? Which route did you go? I'm in the middle of working with IRS to file non-resident due to the sale of a timeshare, and it appears to take about a year to have the whole thing processed.

 

[BM243923]

I have tried to report it on my income tax form, but just deleted the entry as it caused errors in my income tax form and would not let me file. I will call the tax dept and see if they can figure it out.

 

[equitax]

Here'a good source of information on the topic.

http://es-cpas.com/us-income-tax/florida-vacation-rental-properties-us-and-canadian-income-tax