Tax shelter

We consider a tax shelter to include an investment that can be reasonably expected, based on any statement, representation, or promotional literature, to provide federal tax credits, or a combination of federal tax credits and losses or other deductible amounts, that are equal to or in excess of a buyer's net cost in any of the first four years.

The total of the federal tax credits and the losses or other deductible amounts would be equal to, or greater than, the cost of your share of the investment after deducting the prescribed benefits.

For this purpose, the cost of your interest in the property has to be reduced by the prescribed benefits you or a person with whom you have a non-arm's length relationship will receive or enjoy.

Prescribed benefits include provincial or territorial tax credits, revenue guarantees, contingent liabilities, limited-recourse debt, and rights of exchange or conversion.

To claim deductions or losses from tax shelter investments, attach a completed Form T5004, Claim for Tax Shelter Loss or Deduction, and Slip T5013, Statement of partnership income, to your income tax return. Make sure the Form T5004 shows the tax shelter identification number. Also, attach Slip T5003, Statement of Tax Shelter Information.

If this is the first year you are making a claim for your tax shelter, include with your return a Slip T5003. If the tax shelter is a partnership, include a Slip T5013 with your return.

You only have to complete Form T776, Statement of Real Estate Rentals, if you have a rental operation and you are reporting rental income or a rental loss.

Forms and publications

• Guide T4036, Rental Income
• Form T5004, Claim for Tax Shelter Loss or Deduction
• Form T776, Statement of Real Estate Rentals
• Slip T5003, Statement of Tax Shelter Information
• T5013 Statement of Partnership Income
• Information Circular IC89-4, Tax Shelter Reporting

Related topics

• Rental losses

Date modified:

2016-01-05