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Exchange rates to use
Reporting your US property to the CRA
On Canadian returns, foreign income has to be reported in Canadian Dollars. Average annual exchange rates, determined by the CRA or the Bank of Canada, can be used for this purpose.
Filing State taxes
Filing state tax returns is separate from filing federal returns, and it depends on your respective state. For example, Nevada and Texas do not have state tax while California and Arizona among others have such taxes. State tax paid can be claimed as a foreign tax credit on Canadian returns.
adviser.
You need to file a T1135 form (Foreign Income Verification Statement) in Canada if your US rental property is worth more than $100,000. However, you do not need to file this form for property which is held only for personal use.
It is true that always seems to be a fancy idea to be able to own a property south the border, especially during the cold Canadian winter. Do so by all means but be careful in your tax planning to get the real pleasure and not turn your dream into a nightmare.
Note: The information provided on this article is intended to be used as informative. Recent changes proposed to the US and Canadian tax law may have tax implication to rental income on US properties in the current year or years to come. For your personal situation, we strongly suggest to seek advice from an accounting professional or tax legal
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