Mexican-Canadian moving back to Mexico Forms T1161, T1243, T1244 T2091 NR-6, T1159 T776. Expert Income Tax help on cross Border

My_question_is: Applicable-to-Mexico

question:

I have dual citizenship but born in Mexico. After 10 years in Canada I have decided to move back to Mexico. I own an apartment in Vancouver which I bought six years ago and have some equity on it (still paying for it). I would not like to get rid off it yet in case I cannot get used to life in Mexico again.

I will most likely just leave my RRSPs here but close all other accounts.

For tax purposes, will the Canadian government treat me as a non-resident as I am going back to the country that I came from? As it is my principal residence, would it make more sense to sell it and take the cash to avoid paying capital gains?

Is there anything else you would recommend, tax related, for someone going back to his own country?

Thanks


david ingram replies:

The day you  leave to move back to Mexico, you become taxable in Mexico under Article 4 of the Canada Mexico Income Tax Convention (Treaty) which you can find at

http://www.fin.gc.ca/treaties-conventions/mexico_-eng.asp


You will be a non-resident of Canada and any increase in value of the Condo over the day you leave and the day you sell it or move back in becomes subject to Canadian Capital Gains tax first and Mexican Capital Gains Tax second - see Article 13 of the treaty.

Before you go and rent it out, you must have a Canadian RESIDENT sign Canadian NR6 as  your TAX AGENT.

And then this tax agent has to file Forms NR4 to report the rent you have received each year by March 31 of the following year

And THEN - YOU have to file a Canadian T1159 and T776 to report the rental income to Canada.

If you lose money because of more expenses than rent, it is a good idea to capitalize the interest and or the taxes under section 21 to bring the rental income down to zero.  If there is any chance that you might move back into it ten years (or any number) from now, do NOT claim Capital cost Allowance or Depreciation on the T776.

You will then have to change the figures on the T776 to Pesos and fill in a rental schedule on your Mexican tax return.

For your last year in Canada, you will have TWO Canadian tax returns.  One will be a Departing Canada return reporting all of your income up to the date of leaving and this return should include forms T2091, T1161, T1243 and T1244 if necessary.

The second return will be filed as a rental return under section 216(4) of the Canadian Income Tax Act and include forms T1159 and T776. this rental return is not due until June 30 but your departing Canada return is due on April 30th if you or your spouse are employees and June 15th if EITHER of you is self employed.

If you are a married person and your spouse is on title, you will both need to file the returns above.

Good Luck.
david ingram replies:

The day you  leave to move back to Mexico, you become taxable in Mexico under Article 4 of the Canada Mexico Income Tax Convention (Treaty) which you can find at

http://www.fin.gc.ca/treaties-conventions/mexico_-eng.asp


You will be a non-resident of Canada and any increase in value of the Condo over the day you leave and the day you sell it or move back in becomes subject to Canadian Capital Gains tax first and Mexican Capital Gains Tax second - see Article 13 of the treaty.

Before you go and rent it out, you must have a Canadian RESIDENT sign Canadian NR6 as  your TAX AGENT.

And then this tax agent has to file Forms NR4 to report the rent you have received each year by March 31 of the following year

And THEN - YOU have to file a Canadian T1159 and T776 to report the rental income to Canada.

If you lose money because of more expenses than rent, it is a good idea to capitalize the interest and or the taxes under section 21 to bring the rental income down to zero.  If there is any chance that you might move back into it ten years (or any number) from now, do NOT claim Capital cost Allowance or Depreciation on the T776.

You will then have to change the figures on the T776 to Pesos and fill in a rental schedule on your Mexican tax return.

For your last year in Canada, you will have TWO Canadian tax returns.  One will be a Departing Canada return reporting all of your income up to the date of leaving and this return should include forms T2091, T1161, T1243 and T1244 if necessary.

The second return will be filed as a rental return under section 216(4) of the Canadian Income Tax Act and include forms T1159 and T776. this rental return is not due until June 30 but your departing Canada return is due on April 30th if you or your spouse are employees and June 15th if EITHER of you is self employed.

If you are a married person and your spouse is on title, you will both need to file the returns above.

Good Luck.


If your question was not answered fully or you wish to go further, I am available for individual consultations by phone or email or in person for $450 per professional hour. 

Please also note that we prepare Canadian, US, Australian, UK and New Zealand returns on a mail in, email, fax, snail mail or couriered basis. At any time, our clients are in 40 countries or more.  They have every occupation from nuclear Submarine captains to FedEx pilots to Major Bank officers to Politicians, Diplomats and border patrol officers.  My favourite, however, is a penguin catcher in Antarctica among others there..

If you 'really' only have a single question requiring a 'couple' of minutes, you can try phoning me for free as part of the following.

- For a quick free question


You might try calling Fred Snyder's radio program for an answer on a Sunday Morning.. 

Fred Snyder's  "IT'S YOUR MONEY" radio show. on CISL,  650 AM on the dial in Vancouver from 9 to 11:00 AM every Sunday  (604) 280-0650 or (877) 280-0650 - You can listen live from anywhere in the world at www.am650radio.com from anywhere in the world. click on the button in the top left hand corner.
-
-
You might try calling Fred Snyder's weekly radio programs for an answer. 
  1. Circular 230 Disclosure: Pursuant to recently-enacted US Treasury Dept. regulations, we are now required to advise you that, unless otherwise expressly indicated, any federal tax advice contained in this communication, including attachments and enclosures, is not intended or written to be used, and may not be used, for the purpose of (i) avoiding tax-related penalties under the internal revenue code or (ii) promoting, marketing, or recommending to another party any tax-related matters addressed herein.

  2. Privileged and Confidentiality Notice: This electronic transmission (and/or the documents accompanying it) may contain confidential information belonging to the sender. The information is intended only for the use of the individual or entity to which it is addressed. If you are not the intended recipient, you are hereby notified that any disclosure, copying, distribution, electronic storing, or the taking of any action in reliance on the contents of this information is strictly prohibited. If you have received this transmission in error, please immediately notify the sender by reply e-mail and immediately delete this record from your computer system.

Disclaimer:  This question has been answered without detailed information or consultation and is to be regarded only as general comment.   Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader and the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent and appropriately qualified legal practitioner or tax specialist for expert help, assistance, preparation, or consultation  in connection with personal or business affairs such as at www.centa.com or www.garygauvin.com.  If you forward this message, this disclaimer must be included."

-
david ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
4466 Prospect Road
North Vancouver,  BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325

Calls welcomed from 10 AM to 9 PM 7 days a week  Vancouver (LA) time -  (please do not fax or phone outside of those hours as this is a home office) expert  US Canada Canadian American  Mexican Income Tax  service help.
pert  US Canada Canadian American  Mexican Income Tax  service and help.
David Ingram gives expert income tax service & immigration help to non-resident Americans & Canadians from New York to California to Mexico  family, estate, income trust trusts Cross border, dual citizen - out of country investments are all handled with competence & authority.
If your question was not answered fully or you wish to go further, I am available for individual consultations by phone or email or in person for $450 per professional hour. 

Please also note that we prepare Canadian, US, Australian, UK and New Zealand returns on a mail in, email, fax, snail mail or couriered basis. At any time, our clients are in 40 countries or more.  They have every occupation from nuclear Submarine captains to FedEx pilots to Major Bank officers to Politicians, Diplomats and border patrol officers.  My favourite, however, is a penguin catcher in Antarctica among others there..

If you 'really' only have a single question requiring a 'couple' of minutes, you can try phoning me for free as part of the following.

- For a quick free question


You might try calling Fred Snyder's radio program for an answer on a Sunday Morning.. 

Fred Snyder's  "IT'S YOUR MONEY" radio show. on CISL,  650 AM on the dial in Vancouver from 9 to 11:00 AM every Sunday  (604) 280-0650 or (877) 280-0650 - You can listen live from anywhere in the world at www.am650radio.com from anywhere in the world. click on the button in the top left hand corner.
-
-
You might try calling Fred Snyder's weekly radio programs for an answer. 
  1. Circular 230 Disclosure: Pursuant to recently-enacted US Treasury Dept. regulations, we are now required to advise you that, unless otherwise expressly indicated, any federal tax advice contained in this communication, including attachments and enclosures, is not intended or written to be used, and may not be used, for the purpose of (i) avoiding tax-related penalties under the internal revenue code or (ii) promoting, marketing, or recommending to another party any tax-related matters addressed herein.

  2. Privileged and Confidentiality Notice: This electronic transmission (and/or the documents accompanying it) may contain confidential information belonging to the sender. The information is intended only for the use of the individual or entity to which it is addressed. If you are not the intended recipient, you are hereby notified that any disclosure, copying, distribution, electronic storing, or the taking of any action in reliance on the contents of this information is strictly prohibited. If you have received this transmission in error, please immediately notify the sender by reply e-mail and immediately delete this record from your computer system.

Disclaimer:  This question has been answered without detailed information or consultation and is to be regarded only as general comment.   Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader and the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent and appropriately qualified legal practitioner or tax specialist for expert help, assistance, preparation, or consultation  in connection with personal or business affairs such as at www.centa.com or www.garygauvin.com.  If you forward this message, this disclaimer must be included."

-
david ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
4466 Prospect Road
North Vancouver,  BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325

Calls welcomed from 10 AM to 9 PM 7 days a week  Vancouver (LA) time -  (please do not fax or phone outside of those hours as this is a home office) expert  US Canada Canadian American  Mexican Income Tax  service help.
pert  US Canada Canadian American  Mexican Income Tax  service and help.
David Ingram gives expert income tax service & immigration help to non-resident Americans & Canadians from New York to California to Mexico  family, estate, income trust trusts Cross border, dual citizen - out of country investments are all handled with competence & authority.

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