Deemed Residence


My wife and I are US citizens, and my wife became a Canadian citizen in 2000. In 2001 while living in the US, we purchased future retirement property in BC and opened non-resident chequing accounts. In October, 2003 I became a PR, rented an apartment in BC, obtained a drivers licence and credit card, and, after 90 days we both returned to the US to sell our home. It is now sold, there will be capital gains tax, and we will have been out of Canada about 170 days. If we spend a little more time outside Canada, can we skip filing Canadian Income Tax for 2004?

david ingram replies:

I need a time line for when and where you lived and when and what you paid for the properties.
If you were a resident of Canada long enough for your wife to become a citizen, the chances are the US property is taxable because you had it when you left before and there is a deemed sale (creating tax) of the property when you left Canada. In fact, if I am right, you are likely already subject to a $25.00 a day penalty for failure to file form T1161 as a departing Canadian resident.

You should likely buy an hour of my time. Send a time line and details of when and how much you paid for everything, etc.


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