Moving to US to work - Forms T1161, 1243 1244 NR-6 -

My_question_is: Applicable to both US and Canada
Subject:        Moving to US to work
Expert:         taxman at centa.com
Date:           Saturday January 20, 2007
Time:           05:53 PM -0500
QUESTION:
Hi ;
My wife and i currently have a company in Canada, my wife also have other
investment. I have recently received an offer from a US company to move to
LA to work.  The question is what would be the best idea to do this ?
Should we both sold everything and move to the US or My wife can keep these
investments in Canada (mostly land )and just move to the US to live with me
.... She does not work in US but her Canadian Investment may generate some
income for her.
----------------------------------------
david ingram replies:
There is no easy answer.
However if you are moving to the US with the intention of staying there and
becoming a non-resident of Canada, you and your wife must each must file
departing Canada forms T1161, and likely T1243 and 1244.
You and your wife will report yourselves as non-residents to any financial
institutions you have investments with.  If you have rental property, such
as keeping the family house and renting it out, you must file a Form NR-6
before the first month's rent as a non-resident.
this other older question will give you links to the forms.
taxman at centa.com: Please see bottom of message if you wish to unsubscribe.
------------------------------------------
My_question_is: Applicable to both US and Canada
Subject:        tax ramifications if I move to the US?
Expert:         taxman at centa.com
Date:           Sunday August 20, 2006
Time:           02:26 PM -0700
QUESTION:
David, I am considering moving to the US for work.  The fact that my
boyfriend of 4 years lives in Seattle doesn't hurt.  I am Canadian born, but
also have US Citizenship.  I have always lived in Canada, and up until
recently the plan was for us to settle together here.
I am embarking on a work change, and will be seeking work in Seattle...short
term.  About 2 years.
I own a condo in White Rock worth $240K and owe $165K on it.  I am able to
rent it out and would prefer to do that right now rather than sell it. I
have lived in it since 2002.
What are the pros and cons of renting vs selling right now?  What cross
border tax issues should I be looking into?  I am currently unemployed (for
18+ mos) and do not have employment yet in the US.  What is the first step?
I am so confused.  I want to be able to move back into my condo when I
return but what if life is wonderful south of the 49th?  What kind of
penalties can I be hit with?
I thank you for your help with this, and am anxious for your opinions on
anything you might feel is relevant.
-------------------------------------------
david ingram replies:
A. If you move to the US and rent out the condo:
1.	You need to get a Canadian resident tax agent to sign a form NR-6 for
you.  This form tells the Government you are leaving and will be a
non-resident owner of Canadian rental real estate.
Find the form at http://www.cra-arc.gc.ca/E/pbg/tf/nr6/nr6-00e.pdf
2.	You will file a departing Canada tax return showing your date of
departure and pro-rating your exemption amounts by the number of days you
were in Canada.
3.	You will also fill in a T1161 to report the existence of your rental
condo. This is an important form with a $2,500 penalty for failure to file
it on time with your departing Canada return. Find it at
http://www.cra-arc.gc.ca/E/pbg/tf/t1161/t1161-05e.pdf
4.	If you have other assets listed on the T1161 such as Mutual Funds or a
stock portfolio, you may need to fill out forms 1243 and 1244 as well.
B.	You might decide to remain a taxable resident of Canada while you figure
out your life.
If so, you will report your US earnings on your Canadian return and claim a
foreign tax credit for the state and federal taxes, Medicare and FICA paid
to the US.  As long as you remain a resident of Canada for the first four
years, you can claim the rental condo as your personal tax free residence
for up to four years in Canada and three years in the US.
This will mean you will pay a little more tax to Canada because you will be
in Seattle and Washington does NOT have a state tax.  If you were going to
California or New York or Illinois, the taxes paid to the US would usually
offset any Canadian taxes for a single person with no mortgage interest as a
deduction.
Have fun.
david
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