American citizen / resident buying and renting out a

QUESTION: I am an American citizen who is purchasing a new townhouse in
Vancouver.  I plan to maintain my primary residence in the US and rent the
house near the UBC campus 9-10 months a year.  I plan to treat the house as
a second home under US tax law which requires me to be in residence 10% of
the rental days and I will not exceed 6 weeks in any year while I work.  I
have downloaded information on landlord/tenant responsibilities in UBC.  My
questions relate to tax issues: (1) what do I need to do to comply with
Canadian tax law on the rental income; (2) do I need to file a Canadian tax
return; and (3) are my closing costs deductible on my US return?
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david ingram replies:
Before you rent it the first day, you need a "tax" agent who may or may not
be the actual rental agent.
You and the tax agent have to sign and submit Canadian form NR-6 which
guarantees that the agent will file your Canadian Section 216(4) income tax
return if you fail to do so.
Your closing costs are added to the ACB - Adjusted cost Base - of the unit
and depreciated over 27 1/2 years on schedule 4562 and schedule E of your US
return.
Any tax paid to
Canada will be deducted by means of US form 1116 attached to your 1040.
Glad to look after most of this for you.
Answers to this and other similar  questions can be obtained free on Air
every Sunday morning.
Every Sunday at 9:00 AM on 600AM in Vancouver, I, david ingram am a
permanent guest on Fred Snyder of Dundee Wealth Managers' LIVE talk show
called "ITS YOUR MONEY"
Those outside of the Lower Mainland will be able to listen on the internet
at
www.600AM.com <http://www.600am.com/>
Call (604) 280-0600 to have your question answered.  BC listeners can also
call 1-866-778-0600.
Callers to the show and questioners on this board can also attend the
Thursday Night seminars on finance and making your Canadian Mortgage
Interest deductible.
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
New email to davidingram at shaw.ca <mailto:davidingram at shaw.ca>
www.centa.com <http://www.centa.com/>  www.david-ingram.com
<http://www.david-ingram.com/>
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