San Diego American wants to buy Vacation property on

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Hi
I ran across your website via a Google search and I don't really know if you are offering free advice on simple questions as a vehicle for picking up clients, or if your responses would be fee based. Anyway, I'll present my issue and see where it leads.
I am a US citizen looking at buying some vacation property on the Sunshine Coast. I have recently been there and have been working with an agent, but have not yet made any offers. I do not think that I will ever be able to become a permanent reisident (I only achieve 57 of the requisite minimum of
67 points on the immigration self evaluation). 
Even if Canada would want me, I am not sure if it would be the smart thing for me to pursue because I see the potential risk of double taxation. I would be receiving income form US
sources, such as Social Security benefits, employer pension benefits, withdrawals from tax defered savings plans, capital gains from equities or from the sale of US property... all of which is taxable income in the US, but as a permanent resident of Canada, the same income might also become taxable income in Canada. In general, is this an ungrounded fear because of the tax treaty, or is it a real concern? It is an issue that would require professional advice should I ever decide to pursue permanent residency.
At any rate, for the pesent, I will be satisfied with being able to "visit" Canada for a maximum of 6 months at a time should I decide to purchase vacation property.
So far, BUYING seems to be a simple enough process, with a mimimum of taxes and fees for the buyer.
SELLING, on the other hand, seems to be more involved. I would like to know: 
1)  What would be the tax rate on capital gains should I decide to sell the property with a profit,
2)  Aside from real estate agents fees, notary fees, and capital gains taxes, are there any other taxes or major costs that would apply in selling the property?
3)  Does the US-Canada tax treaty address the capital gains issue in a way that eliminates the double taxation concern?
DYING is still another issue. I have a daughter who would be the beneficiery of all my real property according to my California will. I realize that my estate will have to pay capital gains taxes in accordance with the rules set up by the US-Canada tax treaty. I would also like to know:
1)  Are there any other Canadian taxes, such as an "inheritance tax", which would apply? My estate       would be exempt from US inheritance taxes, but I don't know about Canada.
2)  Would my California will be recognized in Canada?
Well, hopefully I will be hearing from you soon.
Sincerely, LXXXXXXXXXX
_________________________________________________________________
david ingram replies:
Good to hear from you and this question is free:
One person in our office (D'Arcy von Schleinitz) commutes to the office from Roberts Creek and another one is just in the position of starting to by building a house in Sechelt (George Hatton CA).  Either of them could help you in the future if you can not get hold of me.
1.    50% of the profit on the sale of your vacation property would be taxable in Canada.  The rates I am qiuoting are just a guide because they will change every year but will likely be within a couple of percentage points when you sell.
Up to $30,000 taxable equals about 20% 
The $30,000 between 30 and 60,000 will be taxed at about 30%
The excess over $60,000 will be taxed at 40%
Therefore a $100,000 profit would mean that $50,000 was taxable.  You would owe $6,000 on the first $30,000 and $6,000 on the next $20,000 for a total of $12,000 of tax on a profit of $100,000 (Canadian Dollars)
When filing your US tax return you would report the sale (after converting to US dollars) on schedule D and then claim a foreign tax credit for the tax paid to Canada on form 1116. There would not be any double taxation.  You would however, pay the highest tax of either country's tax rate. 
2.    There are no other taxes that I know of and I have been a licenced realtor here since 1965 and a US / CANADA tax consultant since 1967.
3.    The US / Canada tax convention does NOT address Capital gains tax rates.  However, the double taxation issued is covered by the foreign tax credits availabel on form 1116 of your US tax return.
SECOND SET:
1.    There is NO Inheritance tax in Canada. However, Canada deems the property to have been sold upon death and there would be a Canadian Tax return which would calculate the capital gains tax to your date of death.
2.    Provided it has been witnessed by two people who are not benficiaries under the will, your California Will should be recognized in Canada.  You might want to veify that with a lawyer.  David Stoller LLB at (604) 922-4702 looks after a lot of US / Canadian estates for us.  You might send him a copy to look at for any suggestions.
Hope this helps.  Note that you have been added to our newsletter list free of charge for the time being.
David Ingram of the CEN-TA REALTY  Group
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
108-100 Park Royal South
West Vancouver, BC, CANADA, V7T 1A2
(604) 980-0321 - Fax 913-9123 [email protected]
www.centa.com www.david-ingram.com
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 in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included."
Be ALERT,  the world needs more "lerts"
 
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