Canada departure tax obligations - T1161 T1243 T1244

QUESTION:

I am a Canadian with an L -1 A inter-company transfer VISA and have sold everything and have moved to the USA. I have purchased a home in Texas where I am working/residing and my daughter attends school. I am being paid and taxed at source in US dollars. Intention is to stay permanently and obtain green card. In the meantime, will I have any tax obligations ?



--------------------------------------------------------------------------------------------------------------
david ingram replies:

As described, you have no further tax obligations to Canada other than filing a final departing Canada return.

Your final Canadian return should show the date of departure and the exemption amounts on Schedule 1 and 428 should have the amounts pro-rated by the number of days you were physically in Canada.  I.e number of days in Canada divided by 365 times the amount on line 300 as an example.

Everything you own is considered to have been sold at the time of departure and if there is a capital gains, there will be departure tax to pay or you will have to post security WITH THE CRA.

If you had left a summer cabin or stock portfolio or other assets worth more than $25,000 behind, you would need to file form 1116

http://www.cra-arc.gc.ca/E/pbg/tf/t1161/t1161-06e.pdf

Complete this form T1161 if you ceased to be a resident of Canada at any time in 
the year and the fair market value of all the properties you owned when you 
left Canada was more than $25,000, not including the following properties: 
 
i) cash (including bank deposits); 
 
ii) pension plans, annuities, registered retirement savings plans, registered 
retirement income funds, retirement compensation arrangements, employee 
benefit plans, and certain other deferred benefit plans; 
 
iii) property you owned when you last became a resident of Canada, or 
property you inherited after you last became a resident of Canada, if you 
were a resident of Canada for 60 months or less during the 10-year period 
before you emigrated and the property is not taxable Canadian property; and 
 
iv) any item of personal-use property (such as your household effects, 
clothing, cars, collectibles) that has a fair market value of less than 
$10,000. 
 
Attach a completed copy of Form T1161 to your income tax return. File your 
return by the filing due date. The penalty for failing to file Form T1161 by 
the due date is $25 a day. There is a minimum penalty of $100, and a maximum 
penalty of $2,500. 
 
List of properties 
 
List below all properties and their fair market value, and indicate either 
(C) for Canadian or (F) for foreign properties (outside of Canada), that you
owned on the date you ceased to be resident of Canada. 

 
Property includes shares (both public and private), bonds, debentures, 
promissory notes, treasury bills, interests in trusts, interests in 
partnerships, personal-use property, business property (including inventory), 
real estate, and security option benefits. 
 
Do not list any property described in (i) to (iv) above. If you need more 
space, attach a separate sheet of paper.
-----------------------------------------------------------------------------------------------------
If you were leaving a cabin, Or stock portfolio or rental house or trust  behind or if you had owned a place in Texas for five years and it had gone up in value, then you would have had some deemed sale departure tax,.  You would calculate it out on forms 1243 and 1244 and might have to post security with the CRA at the time if you did not have the cash to pay the tax.

However, if you sold everything before you left, you will not have 'departure' tax, but you might have capital gains tax to pay on your final return because of the actual sales as opposed to a deemed sale.

Comments (0)

CEN-TA Cross Border Services - Tax, Visas, Immigration
http://www.centa.com/article.php/20071105001236901