My question is: Applicable to both US and Canada
QUESTION: My husband and I are US citizens. We would like to purchase some
land in BC Canada. We were wondering of the tax implications of doing so?
Would we have to pay double taxes(US and BC)?
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david ingram replies:
1. Canada taxes 50% of capital gains at rates from about 22% to 45%
depending upon the province. i.e this amounts to 11 to 22% income tax on
the gross profit.
You would file a T1 return with a Schedule 3 and not claim any exemptions
because you did not live in Canada.
2. You would then convert the amounts to US funds and put the amounts onto
the US schedule D of your 1040. You would then claim credit of the taxes
paid to Canada on US form 1116. You will pay the higher of the two taxes
but NOT double taxation.
Hope this helps ------
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