Michigan US from Ontario Canada -Canadian Taxes - ask

My_question_is: Applicable to both US and Canada
Subject:        US-Canadian Taxes
Expert:         taxman at centa.com
Date:           Wednesday March 23, 2005
Time:           10:00 AM -0800
My wife and I are Canadian Citizens who moved to Michigan for employment
from Ontario in March 2004.  We both received income for the 2.5 months we
were in Canada.  For the 2004 tax year do we claim our Canadian income for
the 2004 year for US taxes(even though during collection of income, we
resided in Canada), and/or do we claim US income in our Canadian Tax claims.
Thank you
david ingram replies "belatedly"
In general you would do your Canadian returns as departing Canadians.  Do
not forget to file Form T1161 which has a $25.00 a day penalty for being
The following question answered previously will help you with the details.
If you have already done your returns, they can be and should be corrected
if necessary.
-----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
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,
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.
This is the form to calculate the tax on the T1161
This is the form that defers tax on the deemed disposition
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
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 means 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
Subject: South Carolina after moving from Ontario - - Gary Gauvin from
Rockwall and Garland Texas - ask an income tax expert experts specialist
----- Original Message -----
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:
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,
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
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US/Canada/Mexico Tax Immigration & working Visa Specialists
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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
davidingram at shaw.ca
www.centa.com www.david-ingram.com
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