QUESTION:
Hello David,
My husband and I are Canadian citizens living in the US. At this point my
husband has returned to Canada and I will follow once our US home is sold.
We were wondering what the tax ramifications of the move would be.
1. Will the Canadian Govt. expect to be able to tax our profit on the US
home sale.
2. What is the best method of movingthe US funds over to our Canadian
account when the home sale occurs?
Here are the specifics:
Husband move to US: Sept 15, 2000
I moved to US: Sept 15, 2001
House in Canada rented out as of August 01, 2001
House in Canda rented till 31 Dec, 2004
Husband returned to Canada and began working 2 May 05
No furniture has been moved from the US house to the Canadian house as of
yet
I will move to Canada once the US house is sold
Purchased house in US Sept 2002 for $270,000
Paid $40,000 for various home improvements
House now listed for $420,000
HOme equity line of credit in US for $52,000
We paid US taxes every year
We padi Canadian taxes every year on the profit from the home rental in
Canada
We never declared world income in either country as I was unaware it was an
issue.
Please feel free to contact me at (w)4xx (h) 4xx.
What fee can I expect to pay for a consultation? (A consultation is what I
really want.)
-----------------------------------
david ingram replies:
I charge $375.00 per hour or part thereof (plus GST if in Canada) for this
type of consultation. I expect you would be an hour which would be $401.25
Canadian.
The profit on the US house is tax free.
However there is a tax on any profits on the Canadian House when you move in
unless you file an exemption application under section 45(3) to defer paying
the tax.
You should amend the US returns to report the Canadian rental. Otherwise,
believe it or not, Canada has a right to try and tax your US income because
you were not reporting your US income to the US. the good news is that they
would not likely win, but they can try.
Hope this helps you decide what you need to do.
If you would like a phone consultation, send me three different times (not
Tuesday or Thursday evenings) when you would be available to phone me.
Saturday and Sunday are okay at his time as well but not Sunday morning
because I do a Radio show on Sundays as follows:
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, I, david ingram am a
permanent guest on Fred Snyder of Dundee Wealth Managers' 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/>
Call (604) 280-0600 to have your question answered. BC listeners can also
call 1-866-778-0600.
Callers to the show and questioners on this board can also attend the
Thursday Night seminars on finance and making your Canadian Mortgage
Interest deductible.
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
New email to davidingram at shaw.ca <mailto:davidingram at shaw.ca>
www.centa.com <http://www.centa.com/> www.david-ingram.com
<http://www.david-ingram.com/>
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