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Hi. I am a United States citizen & I am looking to buy property in Montreal, QC. I will probably buy a triplex. My question is what taxes are involved between both countries and what tax advantages are there? I will probably be renting out two apartments.
JXXXXXXX
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david ingram replies:
If you should make a profit, you will have to pay Canadian Federal income taxes.
In addition, every year you will have to file a Federal NR6 http://www.ccra-adrc.gc.ca/E/pbg/tf/nr6/nr6-00e.pdf before the first rental and before Jan 1rst of the next year.
Then your agent will have to file a Federal NR4 (and the Quebec Equivalent) summary and Supplementary by March 31st to report the rent and any tax deducted to the Canadian Government. http://www.ccra-adrc.gc.ca/E/pbg/tf/nr4/nr4-02b.pdf and http://www.ccra-adrc.gc.ca/E/pbg/tf/nr4sum/nr4sum-00b.pdf
and then you will have to file a Canadian Income tax return under Section 216(4) by June 30th of the following year.
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Your US return is due on April 15th, but you will likely have filed a 4868 to get an automatic extension until Aug 15th.
Then you will convert the Canadian Dollars to US dollars and fill out US Schedule E to attach to your US 1040. If you happen to be in California, you will fill out a California Schedule E which is sometimes different than the Federal Schedule E. If you paid tax to Canada, you will fill out US schedule 1116 to claim the foreign tax credit. Depending upon your income and the relative amounts, you might have to fill out a US 6251 to calculate Alternative Minimum Tax and of course, if there is a 6252, you need another 1116 AMT.
By this time, you will have given up and shipped the return off to us in Vancouver to do for you. I have specialized in US Canada Tax returns now for over 30 years and once administered income tax preparation offices in 22 states and five provinces.
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David Ingram's US/Canada Services
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Res (604) 980-3578 Cell (604) 657-8451
(604) 980-0321
New email to [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."
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This from "ask an income tax and immigration expert" from www.centa.com or www.jurock.com or www.featureweb.com. Canadian David Ingram deals daily with tax returns dealing with expatriate:
multi jurisdictional cross and trans border expatriate problems for the United States, Canada, Mexico, Great Britain, the United Kingdom, Kuwait, Dubai, Saudi Arabia, Thailand, Indonesia, Japan, China, New Zealand, France, Germany, Spain, Italy, Russia, Georgia, Brazil, Peru, Ecuador, Bolivia, Scotland, Ireland, Hawaii, Florida, Montana, Morocco, Israel, Iraq, Iran, India, Pakistan, Afghanistan, Mali, Bangkok, Greenland, Iceland, Cuba, Bahamas, Bermuda, Barbados, St Vincent, Grenada,, Virgin Islands, US, UK, GB, American and Canadian and Mexican and any of the 43 states with state tax returns, etc.
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You may find more answers at www.centa.com
David Ingram of the CEN-TA REALTY Group
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
(604) 980-0321 - Fax 913-9123 [email protected]
www.centa.com www.david-ingram.com
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