Article IV of US / Canada Income Tax Convention Treaty

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My husband and I are thinking of purchasing a home in a border city.  We =
would live in Canada and he would be able to keep his job in the US and =
commute.  What sort of immigration or residency documents does he need?  =
If he can have a permanent address in the US, do we even need to bother? =
 Also, would her have to pay income tax to both countries?=20
It's been challenging to find any information on this topic.  Your =
guidance would be greatly appreciated.=20
david ingram replies:
If you are living in Canada and commuting to work in the USA you are =
taxable in Canada with no exceptions.
If you are living in Canada and your husband is living and working in =
the USA and visits you in Canada on alternate weekends and you visit him =
on alternate weekends, he is taxable in the USA on US income and in =
Canada on any income he may have from Canada (factual resident).
In between, the Canadian Government will / might take a run at him.  The =
ultimate taxation is based on Article IV of the US / Canada Income Tax =
convention.  The US has a form called an 8840 which shows you their =
official "closer connection" rules.  Canada has no such sophistication, =
leaving you open to civil abuse in my opinion.
Take the American form 8840 and make sure that you do not have any of =
the Canadian"isms" on the form if he wishes to avoid Canadian tax.
In the right circumstances, you can do well.  If he is an American =
resident, he can do a joint tax return with you even if you are not in =
the US.
YOU really need to talk seriously to someone who understands it.  I am =
available at a fee of $350 Canadian for such a consultation.
AND to remind you (for free) -  if he is living in Canada and commuting =
to the USA on a daily basis, it is a mute point; he is taxable in Canada =
on his world income.
The 8840 form can be found at:   = =20
Article IV of the treaty follows:
Article IV - Fiscal Domicile - (it is the same number in most treaties)  =
For the purposes of this Convention, the term "resident of a Contracting =
State" means any person who, under the law of that State, is liable to =
taxation therein by reason of that person's domicile, residence, =
citizenship, place of management, place of incorporation or any other =
criterion of a similar nature, but in the case of an estate or trust, =
only to the extent that income derived by the estate or trust is liable =
to tax in that State, either in its hands or in the hands of its =
beneficiaries. For the purposes of this paragraph, a person who is not a =
resident of Canada under this paragraph and who is a United States =
citizen or alien admitted to the United States for permanent residence =
(a "green card" holder) is a resident of the United States only if the =
individual has a substantial presence, permanent home or habitual abode =
in the United states and that individual's personal and economic =
relations are closer to the United states than any other third State.  =
The term "resident" of a Contracting State is understood to include:=20
(a) the Government of that State or a political subdivision or local =
authority thereof or any agency or instrumentality of any such =
government, subdivision or authority, and=20
(b) (i) A trust, organization or other arrangement that is operated =
exclusively to administer or provide pension, retirement or employee =
benefits, and=20
    (ii) A not-for-profit organization that was constituted in that =
State, and that is, by reason of its nature as such, generally exempt =
from income taxation in that State.=20
2. Where by reason of the provisions of paragraph 1 an individual is a =
resident of both Contracting States, then his status shall be determined =
as follows:=20
(a) he shall be deemed to be a resident of the Contracting State in =
which he has a permanent home available to him. If he has a permanent =
home available to him in both Contracting States, he shall be deemed to =
be a resident of the Contracting State with which his personal and =
economic relations are closer (centre of vital interests);=20
(b) if the Contracting State in which he has his centre of vital =
interests cannot be determined, or if he has not a permanent home =
available to him in either Contracting State, he shall be deemed to be a =
resident of the Contracting State in which he has an habitual abode;=20
(c) if he has an habitual abode in both Contracting States or in neither =
of them, he shall be deemed to be a resident of the Contracting State of =
which he is a national;=20
(d) if he is a national of both Contracting States or of neither of =
them, the competent authorities of the Contracting States shall settle =
the question by mutual agreement.=20
Answers to this and other similar  questions can be obtained free on Air =
every Sunday morning.
Starting this Sunday at 9:00 AM on 600AM in Vancouver, Fred Snyder of =
Dundee Wealth Management (formerly Cartier Partners and I), David Ingram =
 will be hosting an INFOMERCIAL but LIVE talk show called "ITS YOUR =
Those outside of the Lower Mainland will be able to listen on the =
internet at
David Ingram's US/Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver,  BC, CANADA, V7N 3L7
Res (604) 980-3578 Cell (604) 657-8451
(604) 980-0321=20
New email to [email protected]
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 in =
connection with personal or business affairs such as at =
If you forward this message, this disclaimer must be included."
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