Hi David,
I found your website and thought I'd try to contact you. My
husband and I live in Kelowna and we are not very confident that the
accountants here are experts in foreign taxes such as yourself.
We will be moving to Mexico in the summer to teach at
xxxxxxxxxxxx.. We are planning to sell our house here before we leave
and are unsure as to what we should do with our money. We are hoping
to achieve non-resident status in order to avoid paying taxes here as
well as in Mexico (probably about 22% there). We have thought about
buying a condo as an investment here and have heard that if you own
property outright in Canada, then you don't have to pay income tax if
you work in another country. Is this true? Would we be better to
transfer our money to Bolivia or someplace else that is a tax haven?
An offshore account?
We would appreciate any information you can offer. Thank you so
much,
xxxxx xxxxxxx
xxxxx xxxxxxx
-------------------------------------------
david ingram replies:Mexico is a tax treaty country. therefore, you do not need to sell your house and abandon all Canadian items to escape Canadian income tax on your Mexican earnings.
You should keep a home in Canada because it is the only way you can close to guaranteeing
that you can afford a house / home here when and if you return.
The number of people i know who sold their Vancouver area home and went to Saudi or Kuwait or Dubai for six or seven years o ftax free earnings and are now coming back and finding that it will cost them more to buy back their house then they earned in total is extreme. For instance, my house went up over $600,000 since Aug 13, 2002. If i had worked tax free in Dubai for $100,000 a year in that time, and saved every single cent, I would need every single cent of my Dubai earnings to buy my house back. How silly / stupid is that? if i had, heaven forbid) spent half of my $100,000 a year for mundane things like rent in Dubai, food in Dubai, a couple of vacations to get away from it all, and maybe a car, I would come home $300,000 short to buy my house back. As I said, how stupid is that? and i know or have talked to a 100 people in that position who are now out of the market. A lady confessed to that situation on air on the radio program last Sunday.
No one leaving the country for work abroad should ever sell their Canadian house unless it is just (for some reason) a bad property to rent. If that is the case, they should sell their home and buy equivalent value rental real estate to ensure that they will .
Mexico is a country with an income tax. If you put your money into some offshore account to avoid Mexican tax, that is really silly. Maybe you have not heard about the quality of life in Mexican jails. While you are in Mexico, you make sure you report every cent of interest, every cent of dividends, every cent of wages and every cent of rent that you collect on your Canadian rental on your Mexican Income Tax return..
When you rent the Canadian house or condo out, you will need to fill in and file forms NR6, NR 4, T1159 and T776 with Canada.
i.e. In Canada, you fill in and have an agent sign a form NR6 BEFORE you rent out the condo. This form must be filled in before the start of every new year. If you did not file one for 2008, you should do so immediately. Then you must file a Sec 216(4) return (form T1139) and a T776 to report the rent and any depreciation by June 30th.
NR6 at - http://www.cra-arc.gc.ca/E/pbg/tf/nr6/nr6-06e.pdf
NR4 (fillable) at - http://www.cra-arc.gc.ca/E/pbg/tf/nr4_flat/nr4-fill-07b.pdf
NR4-Summary (fillable) at - http://www.cra-arc.gc.ca/E/pbg/tf/nr4sum/nr4sum-fill-07b.pdf
T1159 at: - http://www.cra-arc.gc.ca/E/pbg/tf/t1159/t1159-07e.pdf
T776 at: - http://www.cra-arc.gc.ca/E/pbg/tf/t776/t776-07e.pdf
T1161 at: - http://www.cra-arc.gc.ca/E/pbg/tf/t1161/t1161-07e.pdf
T1243 at - http://www.cra-arc.gc.ca/E/pbg/tf/t1243/t1243-07e.pdf
T1244 at - http://www.cra-arc.gc.ca/E/pbg/tf/t1243/t1243-07e.pdf
Your agent must also file form NR4 to report the gross rents received and any tax remitted by March 31st.
Foreign Tax Credit
Then, if you actually paid tax to Canada on the rental, you will claim credit for that tax on your Mexican return as a foreign tax credit.
Departure Return
When you depart Canada with a rental house left behind, you have to file your departing tax return with a form T1161 and maybe T1243 and T1244 as well.
I have a Mexican / Canadian citizen named David Holroyd working with me and living in my house here when he is not at home in Guadalajara.
You might want to book an hour consultation to discuss your situation with us because it is obvious that you are starting off with bad information. Our charge is $450 an hour including a couple of five minute follow up questions.
-------------------------------------
On February 11, 2008, David
Ingram wrote:
It is very unlikely that blind or unexpected email to me will be answered. I receive anywhere from 100 to 700 unsolicited emails a day and usually answer anywhere from 2 to 20 if they are not from existing clients. Existing clients are advised to put their 'name and PAYING CUSTOMER' in the subject line and get answered first. I also refuse to be a slave to email and do not look at it every day and have never ever looked at it when I am out of town. e bankruptcy expert US Canada Canadian American Mexican Income Tax service and help
However, I regularly search for the words"PAYING
CUSTOMER" and always answer them first if they did not get spammed out.
For the last two weeks, I have just found out that my own email notes
to myself have been spammed out and as an example, as I wrote this on
Dec 25, 2007 since June 16th, my 'spammed out' box has
47,941 unread messages, my deleted box has 16645 I have actually looked
at and deleted and I have actually answered 1234 email questions for
clients and strangers without sending a bill. I have also put aside
847 messages that I am maybe going to try and answer because they look
interesting. -e bankruptcy expert US Canada Canadian American
Mexican Income Tax service and help
Calls welcomed from 10 AM to 9 PM 7 days a week Vancouver (LA) time - (please do not fax or phone outside of those hours as this is a home office) expert US Canada Canadian American Mexican Income Tax service help.
$1,700 would be for two people with income from two countries
Catch - up returns for the US where we use the Canadian return as a guide for seven years at a time will be from $150 to $600.00 per year depending upon numbers of bank accounts, RRSP's, existence of rental houses, self employment, etc. Note that these returns tend to be informational rather than taxable. In fact, if there are children involved, we usually get refunds of $1,000 per child per year for 3 years. We have done several catch-ups where the client has recieved as much as $6,000 back for an $1,800 bill and one recently with 6 children is resulting in over $12,000 refund.
David Ingram expert income tax service and immigration help and preparation of US Canada Mexico non-resident and cross border returns with rental dividend wages self-employed and royalty foreign tax credits family estate trust trusts income tax convention treaty advice on bankruptcy
It is very unlikely that blind or unexpected email to me will be answered. I receive anywhere from 100 to 700 unsolicited emails a day and usually answer anywhere from 2 to 20 if they are not from existing clients. Existing clients are advised to put their 'name and PAYING CUSTOMER' in the subject line and get answered first. I also refuse to be a slave to email and do not look at it every day and have never ever looked at it when I am out of town. e bankruptcy expert US Canada Canadian American Mexican Income Tax service and help
Therefore, if an email is not answered in 24 to
48 hours, it is likely lost in space.
You can try and resend it but if important AND YOU TRULY WANT OR NEED
AN ANSWER from 'me', you will have to phone to make an appointment.
Gillian Bryan generally accepts appointment requests for me between
10:30 AM and 4:00 PM Monday to Friday VANCOUVER (Seattle, Portland, Los
Angeles) time at (604) 980-0321. david ingram expert
US Canada Canadian American Mexican Income Tax service and help.
david ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
david ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
Calls welcomed from 10 AM to 9 PM 7 days a week Vancouver (LA) time - (please do not fax or phone outside of those hours as this is a home office) expert US Canada Canadian American Mexican Income Tax service help.
Disclaimer:
This question has been answered without detailed information or
consultation and is to be regarded only as general comment. Nothing
in this message is or should be construed as advice in any particular
circumstances. No contract exists between the reader and the author and
any and all non-contractual duties are expressly denied. All readers
should obtain formal advice from a competent and
appropriately qualified legal practitioner or tax specialist for expert
help, assistance, preparation, or consultation in connection with
personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be
included." e bankruptcy expert US Canada Canadian American
Mexican Income Tax service and help.
David Ingram
gives expert income tax service & immigration help to non-resident
Americans & Canadians from New York to California to Mexico
family, estate, income trust trusts Cross border, dual citizen - out of
country investments are all handled with competence & authority.
Phone consultations
are $450 for 15 minutes to 50 minutes (professional hour). Please note
that GST is added if product remains in Canada or is to be returned to
Canada or a phone consultation is in Canada. ($472.50 with GST if in
Canada) expert US Canada Canadian American
Mexican
Income Tax service and help.
This is not intended to be definitive
but in general I am quoting $900 to $3,000 for a dual country tax
return.
$900 would be one T4 slip one W2 slip
one or two interest slips and you lived in one country only (but were
filing both countries) - no self employment or rentals or capital gains
- you did not move into or out of the country in this year.
$1,200 would be the same with one
rental
$1,300 would be the same with one
business no rental
$1,300 would be the minimum with a
move in or out of the country. These are complicated because of the
back and forth foreign tax credits. - The IRS says a foreign tax credit
takes 1 hour and 53 minutes.
$1,600 would be the minimum with a
rental or two in the country you do not live in or a rental and a
business and foreign tax credits no move in or out
$1,700 would be for two people with income from two countries
$3,000 would be all of the above and
you moved in and out of the country.
This is just a guideline for US /
Canadian returns
We will still prepare Canadian only
(lives in Canada, no US connection period) with two or three slips and
no capital gains, etc. for $200.00 up.
With a Rental for $400, two or three
rentals for $550 to $700 (i.e. $150 per rental) First year Rental -
plus $250.
A Business for $400 - Rental and
business likely $550 to $700
And an American only (lives in the US
with no Canadian income or filing period) with about the same things in
the same range with a little bit more if there is a state return.
Moving in or out of the country or
part year earnings in the US will ALWAYS be $900 and up.
TDF 90-22.1 forms are $50 for the
first and $25.00 each after that when part of a tax return.
8891 forms are generally $50.00 to
$100.00 each.
18 RRSPs would be $900.00 - (maybe
amalgamate a couple)
Capital gains *sales) are likely
$50.00 for the first and $20.00 each after that.
Catch - up returns for the US where we use the Canadian return as a guide for seven years at a time will be from $150 to $600.00 per year depending upon numbers of bank accounts, RRSP's, existence of rental houses, self employment, etc. Note that these returns tend to be informational rather than taxable. In fact, if there are children involved, we usually get refunds of $1,000 per child per year for 3 years. We have done several catch-ups where the client has recieved as much as $6,000 back for an $1,800 bill and one recently with 6 children is resulting in over $12,000 refund.
This is a
guideline not etched in stone. If you do
your own TDF-90 forms, it is to your advantage. However, if we put them
in the first year, the computer carries them forward beautifully.
This from "ask an income trusts tax service and
immigration expert" from www.centa.com or www.jurock.com or www.featureweb.com. David Ingram deals on a daily basis with expatriate tax
returns with multi jurisdictional cross and trans border expatriate
problems for the United States, Canada, Mexico, Great Britain, United
Kingdom, Kuwait, Dubai, Saudi Arabia, Thailand, Indonesia, Japan,
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ingram
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