My question is: Applicable to both US and Canada
QUESTION: I'm a canadian citisen and resident. I have a condo in Florida. I want to sell the condo. What are the fiscal implication in the US for me. For a principal residence and for a secondary residence. I have been told that below 300 000 $ the amount isn't taxable. I know the rule for my canadian taxes, but for the US implication, this is more dificult. Thank for your help.
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david ingram replies:
The $300,000 rule only applies to "withholding" tax and is for the benefit of the purchaser. In other words, if a US person buys any home for $300,000 or less and the home is for his or her own use (not a rental) the US person does not have to withhold 10% tax if he or she buys it from a non-resident of the United States.
In every case, you the non-resident MUST file a US Federal Oncome tax return to report the sale whether you lost money or made a profit.
It is also quite easy to have lost money on the actual sale for US purposes and made money in Canada because of the dollar exchange.
Your US 1050NR tax return MUST INCLUDE FORM 6251 AND the resultant Alternative Minimum Tax calculation. Read the instructions very closely.
After you have paid any tax inthe US, you get to claim it as a credit on your tax return. The official Canadian policy is that you can only claim 50% of the tax because Canad only taxes 50% of the profit but this is a silly theory and you should claim it all and be prepared to appeal if some is turned down.
I, of course, am happy to do the US and Canadian returns for you by fax, email, snail mail or courier. Back in the 60's I was a major player in the sale of some 5,000 Florida properties to Canadians. (Cape Coral, Florida).
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