Capital gains tax on house sale in

My_question_is: Applicable to both US and Canada
Subject:        capital gains tax on house sale in USA
Expert:         taxman at centa.com
Date:           Monday May 22, 2006
Time:           02:24 PM -0700
QUESTION:
You had told me I would have to pay income tax to the IRS when i sell my
house in Florida.  Will Canada also tax me on the sale of a second  home if
I have a home in Canada as well?  Would this not be double taxing, or is
there something that has to be done to prevent that from happening?  thanks!
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david ingram replies:
If you own a home in Canada and a vacation home as well and are a taxable
resident of Canada, the sale of "one" of the houses will be subject to
capital gains tax on your Canadian return whether it is in the Gatineau
Hills, Peggy's Cove, in Nova Scotia or the BC Gulf Islands.
Of course, if both homes are in Canada and the Whistler Condo tripled in
value while the house in town only doubled, we will regularly elect to claim
the vacation home tax free, thereby creating a tax liability on the house in
town where you actually lived MOST of the time.
In the case of a non-resident of the US selling any residence, the US will
tax that piece of property and it is also subject to Federal US Alternative
Minimum tax and in the case of some states like Vermont and California,
State alternative Minimum tax as well.
Therefore, if you are selling the Florida property and having to pay tax to
the US, that tax is a foreign tax credit on line 431 of your Canadian tax
return. Of course, a personal residence is tax free to a Canadian no matter
where it is.  If you do not own a Canadian property, the vacation home in
Florida can be tax free in Canada.
AND as I believe I have already told you in another email, if you file a US
1040 tax return as a resident, you will not owe any tax to the US on the
first $250,000 US of profit.
This taxation is a form of Boolean Logic - "if", "and /or", "then"
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