Canadian Citizen Non-Resident

Date:           Tuesday May 16, 2006
Time:           06:04 PM -0700
I am a former Calgarian, currently Candian citizen, permanent resident of
US. I would like to buy one or more properties in Calgary. If I buy a house,
rent it out for 2 years, and then sell, with a capital gain of 200K, what
taxes am I liable for? What about rental income taxes? If I operate at a
loss, do I still have to pay taxes?
Do I have any advantages being Canadian (I pay US taxes)? How might having
my family members help..they live and one brother rents in Calgary (eg act
as buyer and/or partner)
david ingram replies:
Being a Canadian is sometimes a disadvantage because people you deal with
will not treat you the way you should be treated with regard to income tax.
If you buy and rent out to others, you need a Canadian tax agent to sign
Form NR6 for you. that might be a family member.
You can find it at . This
form should be filed BEFORE you collect your first rent.
The Agent then has to fill out Form NR4 and a form NR4 Summary by March 31st
of the next year  - i.e. Mar 31, 2007 for 2006
Forms NR4 and the Summary can be found at:
If you sell it for a profit of $200,000, the Canadian tax will be about
You will then report it again on schedule D of your US return and claim
credit for the taxes paid to Canada on Form 1116.
This old Q & A will help as well.
I am a us citizen. I am interested in owning investment /rental property in
david ingram replies:
Immigration to Canada is NOT necessary to own property here.
The following email message will give you an idea of what you have to do and
when with regard to the rental property.
We r Canadian citizens and moved to the US due to my husband's work. He's on
a workpermit(H-1B)and we've filed our income tax here in the US. however we
still own property in BC and iam filing returns for the rental income
received from that property.
My accountant says that i have to show my US income tax details just for the
record and i would not be taxed on my US income in Canada once again, as
paid my taxes in the US. Is this true..
I need ur help..
david ingram replies:
A non-resident of Canada with a rental property files a one-page return
under Section 216(4).
There is no place to put the US earned income on the return.
You should likely change accountants rather than being the only one he or
she does.
We /d be glad to look after them for you.  Section 216(4) returns are due by
June 30th so you have to move quicker, rather than slower.
You should have a Canadian resident Tax Agent and have filed form NR-6
before you rented it and the agent should have filed NR-4 forms for you by
March 31st.
The "five" deadlines are:
1.	NR-6 by Dec 31st of the year for the next year.  In other words you have
to file the NR-6 (for each of you) by December 31st for the 2006 year.
2.	NR-4 by March 31st 2006 for the 2005 year.
3.	US 1040 and state return by April 15th
4.	Canadian Section 216(4)return with form T776 by June 30th.
5	The US 1040 by Aug 15th after filing automatic extension.
Because your US 1040 was due on April 15th, it is common to file a US form
4868 to delay the filing of the US return so that you can have the Canadian
information to repeat on schedules E and 4562 and Form 1116 of the US 1040.
It is much easier in the long run to have the same person do both the
Canadian and the US returns at the same time.  That is something that we do
on a regular basis (over 200 Cdn rentals - US residents this year alone).
Typically, we would charge $750 to $1,500 for a US / Canadian and State
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
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Callers to the show and questioners on this board can also attend the
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Interest deductible.
David Ingram's US/Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
Home office at:
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North Vancouver,  BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
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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
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