Deemed disposition of Candian property - International non-resident cross border expert income tax & immigration help estate

Subject:        Deemed disposition of Canadian property when getting a green card
Expert:         taxman at
Date:           Monday January 21, 2008
Time:           07:47 AM -0000
My son is sponsoring me for a US green card - I am a Canadian citizen and have a single family home in Canada. I hope to retain this home in Canada as I will be like a "snowbird", spending a few months in US and a few months in Canada.
How does the "deemed disposition" law in Canada affect me?
If I were to see you at your office, what are your rates - are they for full hours or for portions of an hour?  Thank you.
david ingram replies;
Unless you intend to work in the US, getting a green card is likely a waste of time and money and will just create tax problems for you because you wil have to file two and maybe three tax returns. Anybody can be a snowbird without a green card.
If you are intending to work for all or part of ten years in the US, then getting a green card is the way to go because you will qualify for   Social Security MEDICARE which is every bit as good as our own BC Medical.  
In the meantime, with a green card, your BC medical will be cancelled and even if not cancelled officially, if you do have a medical emergency requiring a lot of medical expenses, BC medical will not cover you if they find out you have a green card.  In fact, if they paid for something in 2009 and in 2015 found out you had a green card in 2009, they (BC medical or Ontario or New Brunswick medical services)  will bill you retroactively for up to 10 years.  Does this happen? Yep!  
I have had clients billed for up to $175,000 by BC Medical when BC Medical found out they were living in the US. 
The reason is simple.  With the exception of Ontario, every other Province and Territory requires a person to sleep in their province for more than 183 nights to qualify for their medical.  Therefore, a person who spent tfour months each in three different provinces would technically not qualify either.  
However, to keep your Green card, you are supposed to be Living (sleeping) in the US for more than 183 days.  You can fuidge it for a year or two but BCMedical, for one, is very efficient when it comes to tracking down people in this situation.  For instance, I am positive that someone goes through the parking garage at Burnaby General looking for US licence plates and turning people in to BC Medical.
If you have to buy Medical in the US, you could find yourself paying anywhere from $300 to $700 a month and even end up buying a medical plan that does not cover a pre-existing condition which leaves you to pay the big bills.
For instance, one lady I know was billed by BC Medical  three years later for a kidney transplant even though she worked in Canda and paid all her tax to Canada and was a member of a corporate Extended medical plan.  She actually lived in the US and commuted every day to her job in Richmond.
If you are leaving Canada, you must file a departing Canada tax return which would involve filing a T1161, 1243 and 1244.
The US then has some hefty reporting rules regarding your RRSP, etc.
I charge $400.00 an hour and as a minimum for consultations in person or by phone.  I am assuming you are in the lower mainland because you suggested coming to see me.
The following about ddeparting Canada might help a little.
I am a Canadian with an L -1 A inter-company transfer VISA and have sold everything and have moved to the USA. I have purchased a home in Texas where I am working/residing and my daughter attends school. I am being paid and taxed at source in US dollars. Intention is to stay permanently and obtain green card. In the meantime, will I have any tax obligations ?
david ingram replies:
As described, you have no further tax obligations to Canada other than filing a final departing Canada return. 
Your final Canadian return should show the date of departure and the exemption amounts on Schedule 1 and 428 should have the amounts pro-rated by the number of days you were physically in Canada.  I.e number of days in Canada divided by 365 times the amount on line 300 as an example.
Everything you own is considered to have been sold at the time of departure and if there is a capital gains, there will be departure tax to pay or you will have to post security WITH THE CRA.
If you had left a summer cabin or stock portfolio or other assets worth more than $25,000 behind, you would need to file form 1116
Complete this form T1161 if you ceased to be a resident of Canada at any time in 
the year and the fair market value of all the properties you owned when you 
left Canada was more than $25,000, not including the following properties: 
i) cash (including bank deposits); 
ii) pension plans, annuities, registered retirement savings plans, registered 
retirement income funds, retirement compensation arrangements, employee 
benefit plans, and certain other deferred benefit plans; 
iii) property you owned when you last became a resident of Canada, or 
property you inherited after you last became a resident of Canada, if you 
were a resident of Canada for 60 months or less during the 10-year period 
before you emigrated and the property is not taxable Canadian property; and 
iv) any item of personal-use property (such as your household effects, 
clothing, cars, collectibles) that has a fair market value of less than 
Attach a completed copy of Form T1161 to your income tax return. File your 
return by the filing due date. The penalty for failing to file Form T1161 by 
the due date is $25 a day. There is a minimum penalty of $100, and a maximum 
penalty of $2,500. 
List of properties 
List below all properties and their fair market value, and indicate either 
(C) for Canadian or (F) for foreign properties (outside of Canada), that you
owned on the date you ceased to be resident of Canada. 
Property includes shares (both public and private), bonds, debentures, 
promissory notes, treasury bills, interests in trusts, interests in 
partnerships, personal-use property, business property (including inventory), 
real estate, and security option benefits. 
Do not list any property described in (i) to (iv) above. If you need more 
space, attach a separate sheet of paper. -----------------------------------------------------------------------------------------------------
If you were leaving a cabin, Or stock portfolio or rental house or trust  behind or if you had owned a place in Texas for five years and it had gone up in value, then you would have had some deemed sale departure tax,.  You would calculate it out on forms 1243 and 1244 and might have to post security with the CRA at the time if you did not have the cash to pay the tax.
However, if you sold everything before you left, you will not have 'departure' tax, but you might have capital gains tax to pay on your final return because of the actual sales as opposed to a deemed sale.
It is very unlikely that blind or unexpected email to me will be answered.  I receive anywhere from 100 to 700  unsolicited emails a day and usually answer anywhere from 2 to 20 if they are not from existing clients.  Existing clients are advised to put their 'name and PAYING CUSTOMER' in the subject and get answered first.  I also refuse to be a slave to email and do not look at it every day and have never ever looked at it when I am out of town.  expert  US Canada Canadian American  Mexican Income Tax help
However, I regularly search for the words"PAYING CUSTOMER" and always answer them first if they did not get spammed out. As an example, as I write this on Sept 2, 2007 (the day before I turn 65), since June 16th (78 days), my 'spammed out' box has 24,417 unread messages, my deleted box has 8063 I have actually looked at and deleted and I answered 576 email questions for clients and strangers.  I have also put aside 472 messages that I am maybe going to try and answer because they look interesting. -expert  US Canada Canadian American  Mexican Income Tax help
Therefore, if an email is not answered in 24 to 36 hours, it is lost in space.  You can try and resend it but if important, you will have to phone to make an appointment.  Gillian Bryan generally accepts appointment requests for me between 10:30 AM and 4:00 PM Monday to Friday VANCOUVER (Seattle, Portland, Los Angeles) time at (604) 980-0321. expert  US Canada Canadian American  Mexican Income Tax help.
David Ingram's US / Canada Services
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My Home office is at:
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North Vancouver,  BC, CANADA, V7N 3L7
Cell (604) 657-8451 - 
(604) 980-0321 Fax (604) 980-0325
Calls welcomed from 10 AM to 9 PM 7 days a week  Vancouver (LA) time -  (please do not fax or phone outside of those hours as this is a home office) expert  US Canada Canadian American  Mexican Income Tax help.
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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 for expert help, assistance, preparation, or consultation  in connection with personal or business affairs such as at If you forward this message, this disclaimer must be included." expert  US Canada Canadian American  Mexican Income Tax help.
David Ingram gives expert income tax & immigration help to non-resident Americans & Canadians from New York to California to Mexico  family, estate, income trust trusts Cross border, dual citizen - out of country investments are all handled with competence & authority.
Phone consultations are $400 for 15 minutes to 50 minutes (professional hour). Please note that GST is added if product remains in Canada or is to be returned to Canada or a phone consultation is in Canada. expert  US Canada Canadian American  Mexican Income Tax help.
This is not intended to be definitive but in general I am quoting $800 to $2,800 for a dual country tax return.
$800 would be one T4 slip one W2 slip one or two interest slips and you lived in one country only - no self employment or rentals or capital gains - you did not move into or out of the country in this year.
$1,000 would be the same with one rental 
$1,200 would be the same with one business no rental
$1,200 would be the minimum with a move in or out of the country. These are complicated because of the back and forth foreign tax credits. - The IRS says a foreign tax credit takes 1 hour and 53 minutes.
$1,500 would be the minimum with a rental or two in the country you do not live in or a rental and a business and foreign tax credits  no move in or out 
$1,600 would be for two people with income from two countries
$2,800 would be all of the above and you moved in and out of the country.
This is just a guideline for US / Canadian returns
We will still prepare Canadian only (lives in Canada, no US connection period) with two or three slips and no capital gains, etc. for $150.00 up.
With a Rental for $350
A Business for $350 - Rental and business likely $450
And an American only (lives in the US with no Canadian income or filing period) with about the same things in the same range with a little bit more if there is a state return.
Moving in or out of the country or part year earnings in the US will ALWAYS be $800 and up.
TDF 90-22.1 forms are $50 for the first and $25.00 each after that when part of a tax return.
8891 forms are generally $50.00 to $100.00 each.
18 RRSPs would be $900.00 - (maybe amalgamate a couple)
Capital gains *sales)  are likely $50.00 for the first and $20.00 each after that.
Just a guideline not etched in stone. 
This from "ask an income trusts tax and immigration expert" from or or David Ingram deals on a daily basis with expatriate tax returns with multi jurisdictional cross and trans border expatriate problems  for the United States, Canada, Mexico, Great Britain, United Kingdom, Kuwait, Dubai, Saudi Arabia, Thailand, Indonesia, Japan, China, New Zealand, France, Germany, Spain, Italy, Russia, Georgia, Brazil, Peru, Ecuador, Bolivia, Scotland, Ireland, Hawaii, Florida, Montana, Morocco, Israel, Iraq, Iran, India, Pakistan, Afghanistan, Mali, Bangkok, Greenland, Iceland, Cuba, Bahamas, Bermuda, Barbados, St Vincent, Grenada,, Virgin Islands, US, UK, GB, and any of the 43 states with state tax returns, etc. Rockwall, Dallas, San Antonio Houston, Denmark, Finland, Sweden Norway Bulgaria Croatia Income Tax and Immigration Tips, Income Tax  Immigration Wizard Antarctica Rwanda Guru  Consultant Specialist Section 216(4) 216(1) NR6 NR-6 NR 6 Non-Resident Real Estate tax specialist expert preparer expatriate anti money laundering money seasoning FINTRAC E677 E667 105 106 TDF-90 Reporting $10,000 cross border transactions Grand Cayman Aruba Zimbabwe South Africa Namibia help USA US Income Tax Convention. expert  US Canada Canadian American  Mexican Income Tax help. 
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