Glossary
Schedule E
Form 1040 / 1040-NR Schedule E
Schedule E is the IRS form for reporting supplemental income and loss, including rental real estate. A Canadian who owns a US rental reports the property's US income and expenses on Schedule E, attached to a Form 1040-NR (or 1040 for a US person).
Who it applies to: Canadians (and others) reporting US rental income to the IRS.
Key facts
- Form
- Schedule E (with Form 1040 / 1040-NR)
- Reports
- US rental income and expenses
- Currency
- USD
How it works
- You report gross US rent and deductible expenses (including depreciation) on Schedule E in USD.
- A Canadian non-resident attaches it to Form 1040-NR; a US person uses Form 1040.
- The net result flows into the return, where the Canada–US treaty and foreign tax credits prevent double tax.
Related terms
FIRPTA
A US withholding on the sale of US real property by a foreign person — generally 15% of the gross sale price, remitted to the IRS at closing. Not a final tax.
T1135
The form Canadian residents file to report specified foreign property — such as a US rental — when its total cost exceeds C$100,000 at any point in the year.
FBAR
A US Treasury (FinCEN) report of foreign financial accounts, required of US persons whose foreign accounts exceed US$10,000 in aggregate at any time in the year.
Frequently asked questions
Who files Schedule E for a US rental?
A non-resident owner (e.g., a Canadian) attaches Schedule E to Form 1040-NR; a US person attaches it to Form 1040. It reports the US rental's income and deductible expenses in USD.
Can I deduct depreciation on Schedule E?
Yes — US tax requires depreciating the building portion of a rental over its recovery period, claimed on Schedule E. It reduces taxable rental income but is recaptured when you sell.
This definition is general information, not tax advice. See the full guide above and verify current rules with the CRA or IRS. ← Back to the glossary
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