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I operated a restaurant business on my commercial property till the end of 2023 then leased the restaurant to another operator. How should I report the income in 2024, as business income or rental income? There are 2 tenants on the property and I do collect GST. Should I report 2023 as my last year of operation? Do I need to apply for another GST number or can I use my existing number to report?
Hi Tien,
Apply for a new GST/HST number. Separate the income and expenses into 2 periods: (a) restaurant operator and (b) rental property. The profit made in period (a) is active and taxed at the small business tax rate. The profit made in period (b) is passive and taxed at the passive income tax rate. Complete Schedule 7 of the T2 return to separate active and passive income.