First thanks for such a great site and such amazing information. I
have told several people about your site as soon as they mention they
might be going to the US for some period of time.
My scenario: I am considering taking a consulting job in the US, but
want to keep a house here in Canada, and rent it out. I may or may
not also own a property in the US when I'm living there. Can you
explain how the rental income on the Canadian property would affect my
tax situation? If I rent in the US, would the property in Canada
still be exempt from capital gains tax if sold? If I own property in
the US how would that impact capital gains tax if one property was
sold.
Thanks for any information you can provide on this.
XXXXXXXe
--------------------------------
david ingram replies:
When you leave Canada, you must file form T1161 and maybe T1243 and
T1244.
You must also file form NR6 and have a Canadian resident sign the form
as well to act as the "tax" agent for your rental house. The "tax"
agent may be the rental agent but they can and often are two different
people.
That also means that any increase in the property's value after you
leave does NOT qualify as a personal residence for Canadian purposes
and is any gain between the day you left and the day you sold it is
taxable when you sell it whether you buy another home in the US or
not.
I am sending another older answer as well.
I would be happy to look after those leaving Canada <> entering the
USA returns and the Canadian rental returns after you leave. Note
that we also assist with TN visas in and out of Canada.
-----Original Message-----
From: David Ingram at home - bus at taxman at centa.com
[mailto:davidingram at shaw.ca]
Sent: Wednesday, March 31, 2004 9:02 AM
To: CENTAPEDE
Cc: TAXMAN; david ingram at home
Subject: TD F-90 T1243 T1244 T1161 South Carolina from Ontario
Sorry, David,
I missed your reply! I thought this was just the same thing we had
sent you. Thank you very much for the information and for the list
of contacts as well. If you feel comfortable with your knowledge in
this area, we will likely go with you. Could you give us a rough idea
how much it would cost for you to do it: The combined Canada, S.C.
and N.C. return?
Also, as we are on a T.N. and (ultimately) I will be on a student visa
with RRSP's in Canada do you think its worth pursuing non-resident
status?
Thanks again,
XXXXX.
==========================
david ingram replies:
You would be looking at $700 to $1,400 Cdn for the three returns. I
realize it is a big spread but departing Canada returns require a
T1161 and possibly a T1243 and T1244.
http://www.ccra-adrc.gc.ca/E/pbg/tf/t1161/t1161-03e.pdf
This is the form to calculate the tax on the T1161
http://www.ccra-adrc.gc.ca/E/pbg/tf/t1243/t1243-03b.pdf
This is the form that defers tax on the deemed disposition
http://www.ccra-adrc.gc.ca/E/pbg/tf/t1244/t1244-03b.pdf
Pro-rated exemptions, etc.
Take a look at the forms.
Your Canadian Accounts require TD F-90 forms and your RRSP's require
special reporting as well. We would start by filing an extension for
the US return - form 4868.
http://www.irs.gov/pub/irs-fill/f9022-1.pdf if this fillable form
does not work,
use
http://www.irs.gov/pub/irs-pdf/f9022-1.pdf
By non-resident status, I think you are referring to the USA. That
would be the last thing you would want because non-residents can NOT
file a joint return. The US joint return will save you thousands.
The first year is a toss-up. Most people would file you as a dual
status which also menas no joint return. The only way to do it is
both ways. To file the joint return in the USA the first year, we
have to add in all your Canadian Income as well and claim a foreign
tax credit. This almost always results in significant US tax savings.
-----Original Message-----
From: David Ingram at home - bus at taxman at centa.com
[mailto:davidingram at shaw.ca]
Sent: March 31, 2004 11:19 AM
To: XXXXXXXXXXXXXXXXXX
Subject: South Carolina after moving from Ontario - - Gary Gauvin
from Rockwall and Garland Texas - ask an income tax expert experts
specialist specialists
----- Original Message -----
From:
To: 'David Ingram at home - bus at taxman at centa.com'
Sent: Tuesday, March 30, 2004 6:34 PM
Subject: RE: Question misdirected
Thanks David,
Here it is again:
Hi,
I just found your site yesterday and I'm excited at the resources
you provide. Generally we are do it yourselfer tax folks, but I think
we may need your services which we can discuss later as it is pretty
complex. Perhaps you could clarify something for us.
We live in Ontario and we are in the process of selling our house.
We have bought a house in South Carolina which will close in June. My
wife is going to go in on a TN visa as a Physiotherapist and I will go
in as her spouse. Later (in August) I will register with a student
visa, so that I do not have to renew it annually like my wife will.
Now my wife will actually be working in North Carolina as a
physiotherapist and we will live (and I will go to school) in South
Carolina.
What are the tax implications of:
A) buying a house in the USA (S.C.) and then selling it after 3-4
years to return to Canada.
B) working in one state (N.C.) and living in another?
Thanks in advance for considering our situation,
xxxxxxxxxxxxxxxxx
==============================================
david ingram replies;
If you buy a South Carolina, North Carolina. Arkansas or Georgia
House and live in it, any gains will be tax free up to $500,000
($250,000 each) if you have lived in it for 24 months out of the last
60 that you owned it.
If you lived in Hull, Quebec and worked in downtown Ottawa, you
would file a Quebec and a Canadian Federal return.
If you live in North Carolina and commute to South Carolina, you
will be filing a South and North Carolina return. You will not pay
double state taxes but you will end up paying the higher rate after
exemptions, credits, deductions, etc.
In your first year in the USA, you have the option of filing a joint
tax return by reporting your Canadian Income as well. This will save
you tax. Most preparers will suggest that you have to file a dual
status return the first year and can make it a joint return.
Whatever you do, have this year's returns prepared by someone who
does both (with experience - not at your learning expense).
There are a lot of us around although we are hard to find. There is
a Steve (don't know his last name because I misplaced it so this is an
appeal for the fellow who gave it to me to resend it) in Halifax and
Gary Gauvin in Rockwall, Texas www.garygauvin.com know what they are
doing.
Gary was my partner in an office on Ottawa in the 80's and 90's.
We, of course, are all happy to help you by snail mail, email, fax
or courier, OR
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 Cartier Partners and I 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
This from ask an income tax immigration planning and bankruptcy
expert consultant guru or preparer from www.centa.com or
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US/Canada/Mexico Tax Immigration & working Visa Specialists
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Calls accepted from 10 AM to 10 PM 7 days a week
Res (604) 980-3578 Cell (604) 657-8451
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davidingram at shaw.ca
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Disclaimer: This question has been answered without detailed
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