QUESTION:
I want to sell a timeshare in Florida for $20,000US. I presume the buyer's
lawyer will withhold all funds until I file a US tax return to get it
released. Is this accurate?
If so, do you handle this type of tax return and what are the fees?
Thank you
Jxxxxxxxxxxxxxx
p.s. I live in Ontario
--------------------------------------------
david ingram replies:
I presume that you have settled this elsewhere.
However, if you have not, the seller should withhold 10% and remit the
balance to you along with a form 8288 which shows the 10% deducted as a
credit to your name.
You will then need to file a 2005 1040NR (US Federal Non-Resident Tax
return) next February or so.
Our fee to calculate the US and Canadian returns (they will be intertwined)
would likely be $750
Canadian.
The sale will be reported on schedule D.
After figuring out the tax which might be zero if you lost money, you will
have to show the sale again on schedule 3 of your Canadian T1 General. If
you paid tax to the US, the amount of tax goes on schedule 1, line 431 and
the gross sale price goes on line 433. You will use these two figures to
calculate the foreign tax credit so that you do not pay double taxation.
This would be a good question to phone the Sunday morning radio show where I
devote an hour a week to answering phone in questions.
Your question was put aside to answer later on.
I am adding your name to my email Q & A list and another question like it
may surface. You can also go to www.centa.com <http://www.centa.com> and
use the search feature to look up an old answer. There are over 3,000
questions answered there and yours just might be there. The specific search
feature can be found at http://www.centa.com/search.htm
Remember, the deadline for US citizens living in Canada is June 15th. The
deadline for Self-Employed Canadians and their spouses is June 15th. The
deadline for non-residents of Canada with Canadian rental properties is June
30th. The deadline for Foreign (Canadian or French or ??) accounts to be
reported to the US Treasury is June 30th. The deadline for US returns when
you filed a 4868 automatic extension form is August 15th.
david ingram
David Ingram's US/Canada Services
US / Canada / Mexico tax, Immigration 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 Fax (604) 980-0325
Email to taxman at centa.com <mailto:taxman at centa.com>
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