My_question_is: Applicable to both US and Canada
Subject: tax issue as dual citizens of US and Canada
Expert: taxman at centa.com
Date: Tuesday December 14, 2004
Time: 04:24 PM -0800
QUESTION:
Me and my husband are american citizens who are thinking of applying
Canadian residency and purchsing a Bed&Breakfast business in Ontario Canada.
My husband plans to cross the border daily to continue his job in the
states. I will be running the B&B business in the high season and will also
do some job in the states during low season. My questions are: 1) To which
country should we be paying the taxes? I understand we will be filing tax
returns to both countries and probably will get foreign tax credits from one
country to the other. 2)How mcuh our tax roughly will be, say we have EI of
US$70,000 and gross profit from B$B of CAN$50,000 ? 3)Does Canada allows you
to itemize the interest and taxes you paid on your property?4) If we were to
have you prepare our income tax returns, roughly how much the fee will be
for all the necessary returns? Do you offer the Peace of Mind warranty like
the H&R Block in the states? 5)to make it more complicated, we also have
rental properties in the states we want to try to sell before we land in
Canada. If for some reason, we are unable to sell them before we land, how
will our rental income be taxed and how will we be taxed later when we do
sell our rental properties at a gain? Thank you very much.
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david ingram replies:
This question goes far beyond the scope of the "free Q & A".
I would likely charge you $350 to $500 to answer this and would need more
details.
Preparing the returns would likely be in the $1,000 to $1,500 Cdn range and
include the Canadian, US and state returns (New York / Michigan likely).
If you get landed status in Canada, all your US properties are valued for
Capital Gains purposes at what they were worth the moment you moved to
Canada.
If you sold the properties after you came to Canada, you could likely add
$200 a property to the above quote.
Goto http://www.cic.gc.ca/english/skilled/assess/index.html
This is the self-assessment test for an individual to determine his or her
eligibility to immigrate to Canada without being sponsored by a spouse.
To qualify on your own, you need 67 points.
Another possibility would be to come as an Investor which would require a
Net Worth of $800,000 Canadian and an investment of $400,000 for five years
with no return on the investment.
And yet another possibility would be to come as an Entrepreneur which
requires a net worth of $300,000, an investment of $150,000, ownership of at
least 33 1/3% of a Canadian Business and the hiring of at least one full
time Canadian resident who is not related to you.
It is not likely that you would hire a full time person for a Bed and
Breakfast.
Every province but Ontario also has a Provincial Nominee Program where the
province approves your business plan.
I have added you to our list. After a while, "every" question seems to get
answered, AND
Answers to this and other similar questions can be obtained free on Air
every Sunday morning.
Every Sunday at 9:00 AM on 600AM in Vancouver, Fred Snyder of Dundee Wealth
Management and I, David Ingram will be hosting an INFOMERCIAL but LIVE talk
show called "ITS YOUR MONEY"
Those outside of the Lower Mainland will be able to listen on the internet
at
www.600AM.com <http://www.600am.com/>
Local calls are taken at (604) 280-0600 and Long Distance calls are taken at
1( 866) 778-0600
I do not know how far the LD line reaches.
=========================================
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