QUESTION: Hi David,My husband and I are US Citizens and are thinking of selling our summer home in Canada. I have researched online quiet a bit on the forms/paper work required, but I am unclear how the process/timing would go. Also, I have a tax question as well.Before we list with a Realtor, I am wondering how much time we should state in our listing agreement as to when the home could be closed on by a potiental buyer, that would allow us to file the T2062 and get the Certificate of Compliance. And is the T2062 typically filed after an offer is made or after the potential buyer has completed inspections, and loan approval? Or is this all done at the time of closing? If so who's attorney holds the tax money that would be sent for the Certificate of Compliance.We currently do not have an ITN number, should we file for that now or wait and do both forms together. (T1261 and T2062) From what I have read it looks like my husband and I both need to file each of the forms as both names are on the title of the house. Please correct me if I am mistaken.For my last question, we bought when the exchange rate was 1.535 in 1998 now it is 0.990. How is the gain in the exchange rate handled?Thank you in advance for your help.
---------------------------------------------------------------------------david ingram replies:
This is likely the last question I will answer until May. April 30this our next tax deadline and i am way too far behind.
Depending upon where the house is located, the CRA is taking threemonths or more to issue the T2062 clearance certificate for the sale. The certificate must be applied for within 10 days of the completion toavoid a $25.00 per day fine.
The responsibility to withhold the money is that of the purchaser. Your attorney or their attorney will decide who holds it and it is myexperience that the purchaser's attorney will simply give the money tothe seller's attorney on their undertaking to hold it until thecertificate has been issued.
You can file the T1261 anytime and likely the sooner the better. Thatway, your attorney will have a number to use when he or she sends inthe T2062.
There is a fillable T1261 form at http://www.cra-arc.gc.ca/E/pbg/tf/t1261/t1261e-fill-06e.pdf. You should save a blank form to your computer first. Fill it out onyour computer because it will not save 'with' the information from thegovernment site.
The T2062 is not available in a fillable format but you can find itat: http://www.cra-arc.gc.ca/E/pbg/tf/t2062/t2062-08e.pdf
You should also fill out T2062A if there is a building on the propertyto break down the building and land portions -- land on T2062 -Building on t2062. http://www.cra-arc.gc.ca/E/pbg/tf/t2062a/t2062a-08e.pdf
For US purposes, you use the Dollar values at the time you bought andsold in US dollars. that means that you will be paying tax on theexchange value on your US return.