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My question is: Applicable to both US and Canada
QUESTION: Hi,
I am a Canadian citizen that intend to by
some US properties for rehab for a flip or rental.
My questions are:
a) Should I form a Nevada Corp to do that for better US and Canada tax treatment?
b) Can the title of the property be transferred easier to that Nevada Corp even I am an alien?
PXXXXXXXXXXXXXXXX----------------------------------------------------------------
david ingram replies:
The first point I should mention is that you are not allowed to do any work on a piece of property that you buy for rental or to flip. You are not allowed to paint it, repair the porch, put in a window or do anything that involves your own labour.
You can hire American residents to do the work for you, but you cannot do it yourself. You also cannot collect the rent for a rental property. Your tenant can deposit themselves to your account or mail it to you in Canada but you cannot collect "yourself".
Think of Union rules.
If you cannot do the work yourself, it is difficult to make a profit at rehab.
You can certainly have a Nevada Corporation. However, it will just cost you money and not save you any tax and will cost you more tax if it makes a profit. Forget about what you have heard. If it was really that good, "EVERYBODY" would have one. You would be the owner of a FPHC (Foreign Personal Holding Company) which automatically pays a higher tax rate in the USA and because its mind and control (YOU) is Canadian, your Nevada FPHC also has to file a Canadian Corporate Income tax. The accounting and legal work will make lots of people better off at your expense.
In addition, the Nevada corporation will mean that you are really limited in your actions south of the border. Again, think Union Rules.
If you are even remotely thinking of investing in multiple real estate properties in the US, you need to sit down with someone like myself and look at what you are doing. If you are in the Lower Mainland, my contact numbers are below. If you are outside the lower mainland, you need to find someone that does both US and Canadian returns at the same time and understands US Immigration rules so that your tax return does not show "you" doing something that you do not have a visa for.
David Ingram's US/Canada Services
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Calls accepted from 10 AM to 10 PM 7 days a week
Res (604) 980-3578 Cell (604) 657-8451
Bus (604) 980-0321
[email protected]
www.centa.com www.david-ingram.com
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 & the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent financial, or real estate planner or advisor & appropriately qualified legal practitioner, tax or immigration specialist in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included."
This from ask an income tax immigration planning and bankruptcy expert consultant guru or preparer from www.centa.com or www.jurock.com or www.featureweb.com. Canadian David Ingram deals daily with tax returns dealing with expatriate:
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