To: taxman at centa.com
Subject: IRS/CCRA Capital Gains re: house sale
I have a winter home in Florida (that I bought in April 2004)
that I wish to sell to buy a more expensive one on the beach. If
I make $200,000 on my current house in Fla. to use to buy the
more expensive house, what are the USA & Cndn tax implications
please? I am on a pensioner's income now but will Capital gains
tax & higher income tax bracket apply because of getting the
$200,000 even if I use it to buy another more expensive house?
Even though I live in canada the majority of the time (rent
apartments). I do not own a home in Canada, so I'm confused about
capital gains applying only to second house/cottage in Canada.
thank you for your assistance.
PS: great site!
========================
david ingram replies:
What a lovely question.
If you do not own a house in Canada, the home is tax free for
Canadian Tax purposes.
Although you have probably been ignoring or trying to avoid US
income tax issues, if you have averaged more than 120 days a year
in Florida for the past three years (likely) you can file your US
returns and claim it tax free in the USA as well.
Nothing new about this.
Goto www.centa.com and read the April 1994 newsletter which you
will find in the top left hand corner. this will show you when
you should have filed a US return as a "tax" resident because of
days in the country.
You will need to file 2003, 2004 and 2005 1040's to qualify here
and will likely have a hard time finding anyone who truly
understands the concept and process.
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