David,
A Canadian friend of mine has been working in the
Thank
you,
--------------------------------------
---------------------------------------------------------------------------david ingram replies:
6. Where an individual (other than a citizen of the United States) who was a resident of Canada became a resident of the United States, in determining his liability to United States taxation in respect of any gain from the alienation of a principal residence in Canada owned by him at the time he ceased to be a resident of Canada, the adjusted basis of such property shall be no less than its fair market value at that time.
7. Where at any time an individual is treated for the purposes of taxation by a Contracting State as having alienated a property and is taxed in that State by reason thereof and the domestic law of the other Contracting State at such time defers (but does not forgive) taxation, that individual may elect in his annual return of income for the year of such alienation to be liable to tax in the other Contracting State in that year as if he had, immediately before that time, sold and repurchased such property for an amount equal to its fair market value at that time.
Paragraph 6 deals with the principal residence which was tax free up to the date of departure.From: [email protected]
[mailto:[email protected]]
On Behalf Of US / Canada Income
Tax Help - CEN-TAPEDE
Sent:
Tuesday, August 19, 2008 12:55 PM
To: CENTAPEDE; CENTAPEDE-ca;
jurock
Subject: US CANADA
Canadian Living in US selling house in
QUESTION:
As per Canadian Income Tax law
(section 116) that a non-resident dispose a property then buyer's lawyer must
withheld 25% of sale price and remit to Revenue
awyer
yet. I know this deal has gone bad but what are my chances that I can still get
to keep my house? What are other consequences I might be facing that buyer's
lawyer might cause in coming days?
Best
Regards,
-----------------------------------------
david ingram replies:
The 25% is the starting
figure and is only a withholding tax.
If you left
If it was worth
$400,000 and you are selling it for $500,000, by filing forms T2062 and T2062A,
you can have the withholding reduced to $25,000 (25% of the $100,000).
When you filed your actual tax return at the end of the year, the actual tax on
$100,000 profit would only be about $12,000 and you would get a $13,000
refund.
By canceling the sale or failing to proceed, the realtor has a
legal right to claim a full Real estate commission from you and the buyer can
sue you for non-performance and any losses they have sustained. Those two
situations are likely far more serious than the tax possibilities.
You need to consult another real estate lawyer to understand your
rights.
If no one told you about the forms T2062 and T2062A, you were not
served properly.
If your lawyer did not explain form T2062A and T2062 to
you , you need a different lawyer.
If it is a BC sale you could try Bill
Spohn at (604) 926-8681 or David Stoller at (604) 922-4702 -- both understand
non-resident sales.
You also should have filed form T1161 for the return
for the year that you left
----------------
these
older questions might
help.
-----------------------
Hello ! I am a Canadian citizen moved to USA in Jan.1.07. I am selling my house after 10 months(empty after I left).I still have bank a/c's and my wife is a Canadian PR. Will I have problems to sell my house in Chatham , Ontario . Please reply - 309-333-xxxx.
Regards
xxxxx xxxxxxxx
------------------------------------------------
david ingram replies:
I see you sent this twice - sorry it was not answered but I do get 30 to 100 a day and can not even begin to answer them all.
This has been answered for other people however in the time between the two questions.
Because you are not living in Canada , anyone buying the house is required to withhold 25% of the GROSS sale price unless you fill in and file forms T2062 and T2062A with the CRA within ten days of the actual sale.
This form would take into account that the house was your personal residence up to the day you left.
For 2007, you must file form T1161 as a departing resident. Failure to file Form T1161, can end up with a $2,500 fine as shown below. Happy to look after these departing Canada returns for you.
These similar questions were answered on Feb 17 for instance.
------
Hi David,
(1) I am a Canadian Citizen and employed in
(2) Since the
employer closed down the facility, I received unemployment benefit until
November 04, 2008. I have not received any paper from EI income so
far
(3) Since November 05, 2007, I am working in
Can you please tell me how
much it would cost for filing tax against above income? Which documents I
need to provide you?
Next year, I would have only income from
Regards,
------------------------------------------------------------
david
ingram replies:
If you do not want to report your
Our fees are outlined in the Disclaimer below following some
older questions.
QUESTION: Hi David, I am Canadian citizen, worked in
david ingram
replies:
An NR4 does not go on the Canadian return. It goes on
Schedules B and 1116 of the
The T4 does not go
on the
I am too busy to come up with a new
answer but this older one will give you an idea.
QUESTION: Hi David, I really
need your help in filling U.S tax and I am getting mixed messages which forms to
file. I am a Canadian Citizen in U.S on TN visa for more than a year. I have
RRSP in
david ingram
replies;
You need to file a departing
For the
1. File a 1040NR dual status statement and a Dual
Status 1040 Income Tax return with no standard
deduction
or
2. File a full 1040 which includes your
Canadian income and gives you a full standard deduction and the right to file a
joint return if married. This is usually the best if you left
If you can't figure it out, file an extension form 4868 (find
it at http://www.irs.gov/pub/irs-pdf/f4868.pdf )
and
then send the information to us at the address in blue below to complete for
you.
--------------------------
QUESTION:
We moved to the
kept with the intent of renting it out, and were
unaware of the requirement to file a T1161 until we
began
working on our 2005 taxes with the assistance of
an accountant. By the time he got involved, it was
already
late. In January 2007, CRA assessed a late filing
penalty for both myself and my husband as joint owners of
the
property. The statement was sent to our old
address, even though we updated our address at the time we
sent
in our 2005 tax returns. My question is this: Is
there any way that we can get the late filing penalty
forgiven?
We have done everything else by the books, and we
did file the T1161 when our accountant brought it to
our
attention. Thank
you.
-------------------------------------------------------------------------
david
ingram replies:
The T1161 for a departing Canadian is due on April 30th
of the year following the departure. The penalty is a minimum of $100 or
$25.00 per day to a maximum of $2,500. This is the same penalty for the
late filing of a T3 return with distributions.
I know of no method of
officially canceling the $2,500 penalty you will each have received. You
could try writing to the FAIRNESS COMMITTEE and explain the situation and they
might cancel it. for $5,000, it is certainly worth the effort.
You
can start looking up the rules for the FAIRNESS COMMITTEE here:
http://www.cra-arc.gc.ca/agency/fairness/prov_3-e.html
I
do not expect them to agree but they might.
You might write to Prime
Minister Stephen Harper as well. The penalty is unfair because although
easy to find if you know what you are looking for, NO ONE knows about it
automatically.
The tax preparation programs do not tell you to
fill it in when you put a date in for departing
The $2,500 penalty is imposed after 100 days.
---------------------------------
SUGGESTED
PRICE GUIDELINES - Aug 5, 2008
david
ingram's
US /
US /
My Home office is at:
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
David Ingram
gives expert income tax service & immigration help to non-resident
Americans & Canadians from
Phone
consultations are $450 for 15 minutes to 50 minutes (professional hour). Please
note that GST is added if product remains in
This is
not intended to be definitive but in general I am quoting $900 to $3,000 for a
dual country tax return.
$900 would be one T4
slip one W2 slip one or two interest slips and you lived in one country only
(but were filing both countries) - no self employment or rentals or capital
gains - you did not move into or out of the country in this
year.
$1,200 would be the
same with one rental
$1,300 would be the
same with one business no rental
$1,300 would be the
minimum with a move in or out of the country. These are complicated because of
the back and forth foreign tax credits. - The IRS says a foreign tax credit
takes 1 hour and 53 minutes.
$1,600 would be the
minimum with a rental or two in the country you do not live in or a rental and a
business and foreign tax credits no move in or out
$1,700 would be for
two people with income from two countries
$3,000 would be all
of the above and you moved in and out of the country.
This is just a
guideline for US / Canadian returns
We will still
prepare Canadian only (lives in
With a Rental for
$400, two or three rentals for $550 to $700 (i.e. $150 per rental) First year
Rental - plus $250.
A Business for $400 -
Rental and business likely $550 to $700
And an American only
(lives in the
Moving in or out of
the country or part year earnings in the
TDF 90-22.1 forms are
$50 for the first and $25.00 each after that when part of a tax
return.
8891 forms are
generally $50.00 to $100.00 each.
18 RRSPs would be
$900.00 - (maybe amalgamate a couple)
Capital gains *sales)
are likely $50.00 for the first and $20.00 each after
that.
Catch - up
returns for the
Email and Faxed information is convenient for the sender but very time
consuming and hard to keep track of when they come in multiple files. As
of May 1, 2008, we will charge or be charging a surcharge for information that
comes in more than two files. It can take us a valuable hour or more
to try and put together the file when someone sends 10 emails or 15 attachments,
etc. We had one return with over 50 faxes and emails for instance.
This is a
guideline not etched in stone. If you do your own TDF-90 forms, it is to
your advantage. However, if we put them in the first year, the computer carries
them forward beautifully.
--IRS
Circular 230 Disclosure: To
ensure compliance with requirements imposed by the IRS, please be advised that
any U.S. tax advice contained in this communication (including any attachments)
is not intended or written to be used or relied upon, and cannot be used or
relied upon, for the purpose of (i) avoiding penalties under the Internal
Revenue Code, or (ii) promoting, marketing or recommending to another party any
transaction or matter addressed herein.--
-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
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