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QUESTION:
I am a U.S. citizen and me and my family are moving to Canada next month. We plan on
selling our current home (where we live) in Maryland and leasing a house in Canada. Do
we have to pay Canadian taxes on the sale of our house? We are assuming the sale
will happen after we are in Canada.
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david ingram replies:
Assuming that you have lived in the Maryland house as your primary residence for 2 out of the last 5 years and the profit is les than $500,000, there would be no US tax.
For Canadian purposes, the house is deemed to be given an adjustd cost bvase of its valu when you cross the border. So for Canadian purposes, if you paid $100,000 and it was worth $300,000 when you came to Canada, and you sold it three months later, there would not be any gain and it would be tax free for Canadian purposes under our rules.
If it holds on for a long time and there is a material change in value, we will ahve to explore the principal residence rules and Canada's form T2091. You can look at the form yourself at:
http://www.ccra-adrc.gc.ca/E/pbg/tf/t2091_ind/t2091_ind-02e.pdf
We, of course, would be pleased to help with your Leaving the US tax returns and your first year Canadian returns. You will go crazy trying to find someone and we are ideally suited to handle your problem by mail, email, fax or courier.
If I am not available if you phone the office, ask for D'Arcy von Schleinitz or Gail Ritter.
david ingram
David Ingram of the CEN-TA REALTY Group
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
108-100 Park Royal South
West Vancouver, BC, CANADA, V7T 1A2
(604) 980-0321 - Fax 913-9123 [email protected]
www.centa.com www.david-ingram.com
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