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American married to a Canadian

I married a man from Canada last October (2006).  I work
here in the US, he is still in Canada.  We are in the process of
filing visa papers for him (I130).  When filing my taxes for
2006, do I have to claim him (as married), married, filing
seperately, or as single, and do we have to report his
worker's comp and pension (Canadian) income in the US
forms?  This is his only source of income.  I filed for an
extension, as my tax person did not know how to handle this  
situation.  Thank you for your help!

david ingram replies:

You have a choice. 

You can file as MFS and claim him as a dependent becausenone of his income comes from the US..


You can file a joint return, report his Canadian income and claim foreign tax credits by filling in US form 1116

The Workers Compensation would be put on the return and removed as it is tax free in both countries.

We can do it for you if you can not figure it out. �
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US resident sells T2062 T2062A T1159 T776 1116 Non-res tax return

QUESTION: I have moved to the US since 2000 and current a green card holder. I still have a property in canada and currently listed as second home in the US tax return. I am planning to sell this property in the near future. Do I need to pay capitial gain tax in both US/Canada and how much?

david ingram replies:

It sounds like the second home in Canada has being sitting empty.

When you sell it, the purchaser's lawyer is going to withhold 25% of the gross sale price as Canadian Withholding Tax - UNLESS - you file form T2062 within 10 days of the sale.  .

T2062 -

The purpose of the T2062 is that it will identify the value of the house the day you crossd the border and the purchaser will only have to withhold tax on 25% of the difference invalue between the day you left and the day you sold it.You can NOT claim real estate commissions and other costs of sale on this form which means when the return is actually filed there is always a refund..

THIS IS NOT THE TAX RETURN, it is merely a withholding tax form.


You will then have to file a tax return to report the sale next year.  This return will tax you on 50% of the gain by using schedule 3 and 1.  You can claim the real estate sales commissions, lawyers fees and other costs of sale at this point.  File a T1 tax return with Schedule 3 and Schedule 1.


Schedule 3 - Capital Gains -

Non-Resident Schedule 1 -

All these figures are then converted to US dollars and put on schedule D of the US return.  taxes paid to Canda are claimed on US schedule 1116.


If the property was rented, you also have to file form T2062A and make sure that your T1159 and T776 forms were filed for each year the property was rented.

T2062A -

T1159 -

T776 - (fillable)

If rented, make sure the T776 rental figures were converted to US dollars and put on schedule E.  Any taxes paid to Canada would go on the schedule 1116 you used for the capital gains tax paid.

Schedule E -

Schedule 1116 -

Note that the T2062 and T2062A forms will likely be the same from year to year.  However, the US and Canadian schedules shown above are all 2006 forms and you will need to get hold of the equivalent 2007 or 2008 forms when you actually make the sale.

And, of course, we can look after all of it for you when the time comes. That is what we do. �
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U.S. investments & return to Canada - Dan Walkow Darrell Thompson


I will be returning to Canada shortly after living and working in the U.S. for several years.  I will be maintaining a bank account in the U.S. I also have mutual fund investments here in the U.S. that I plan to maintain.  Otherwise, I will have no U.S. sources of income.  What will be my continuing tax liabilities in the U.S. assuming I live and work in Canada but maintain the bank account and mutual funds in the U.S.?  Thank you. ----------------------------------------------------------------------
david ingram replies:

Assuming that you are not a US citizen, the financial institution with the mutual funds should be withholding 15% of any dividends under Article X of the US / Canada Income Tax Treaty (Convention).

Although Article XI of the Convention also has a withholdiong rate of 10% of any interest paid and Canada does enforce it, the US does not enforce the dedcution so there will not be any US withholding on any interest.

Likewise, there is no capital gains tax to pay to the US when a Non-resident owns publicly traded stock.

It is also likely that your US financial Institution will want to close your mutual fund account because they are not licenced to deal with a resident of Canada. 

Dan Walkow and Darrell Thompson are two Canadians who can and will maintain a US account for you  (they are in Canada) becaue they have made the effort to licence themselves over maost of North America.

This older Q & A will explain further.


I am a US Citizen and Landed Immigrant of Canada. Do I have any legal or other restrictions  for buying, selling, trading stocks, bonds, mutual funds, or having a broker on both sides of the border doing the same for me. I am getting mixed information from brokers on both sides and NEED an experts advice.
david ingram replies:

The restriction is NOT on you by government.

The restriction is on the people you are dealing with.  They are restricted by the Securities Coimmissions and their licencing as to whom 'they' can sell to.

In other words, if you live in BC, an Ontario Securities broker or Mutual Fund salesman can NOT deal with you.

Some like Fred Snyder are licenced in BC and Ontario and can deal with you but even two provinces is rare.

When you are talking about BC -  Arizona, or Ontario - Florida, you have a real problem.

The following older answers will likely help - Dan Walkow and Darrell Thompson HAVE gone to the effort to be able to deal with cross-border situations.

QUESTION: 1. have been trying to find ethical investment firm to go with in Canada and can not seem to get any unbiased answers We live in Red Lake Ontario (landed immigrants), but are also US citizens

2. Is this Stansberry & Associates legit, as they seem to have many different opportunities claiming great returns
Pinchot Retirement Plan,  Master Limited Partnership, Market Index Target Term Security , Oakmark Select Funds
Thanks greatly looking forward to your email

david ingram replies:
I have no good or bad knowledge about Stansbery and Associates. None of my clients deal with them to my knowledge.

From looking at their website, they seem to be a newsletter operation as mucyh as anything.  I have about 15 interviews with newsletter writers on gold (John Embry), oil, uranium (Martin Kafusa), silver (Sean Rahkimov) real estate (Ozzie Jurock), futures and commodities (Victor Adai), Resources in General (Elsworth Dickson, Publisher of Resource World)  etc at - mostly in the third column.

Two ethical people who specialize in selling securities, RRSPs, etc., to US citizens in Canada or Canadians in the US  are:

Dan Walkow
Seabank Financial
White Rock
Local     (604) 541-9952
L D        (866) 541-9952


Mr Darrell Thompson
Blackmont Securities
Local    (416) 874-8007
LD        (866) 775-7704 __
These two individuals and their companies have gone to the effort to get themselves registered just about everywhere so they can deal with a Candian in Florida or California or Nevada, etc.

Note that because of their specialty, they tend to deal with accounts in excess of $200,000

However, both parties would welcome an exploratory call. �
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Nexus card taken away for possession of dog repellent - Dangers at the US / Canada border

Hi David~I have a question for you~I had my car searched as a "Nexus Compliance requirement" by Homeland Security.

In the glovebox the Canadian officer found a 3 inch Domestic Dog Repellant-made in Canada. Please see attachment pictures...

The officer told me I had a weapon-she then gave it back to me???? Doesn't this qualify me to have my card re-instated, as having the "WEAPON" returned to me????? ( I DON'T BELIEVE IT SHOULD HAVE BEEN RETURNED to me if the issue was so important!!!)

Then a couple of days later, they cancelled my NEXUS card.

Can you please respond to this issue for me.

Thanking you for your expertise, always

david ingram replies:

There is no doubt that your cannister was illegal in Canada and I do not understand why it was returned.

The law clearly states that dog or bear spray is only legal if in a 225 ml or larger container. This is to stop its being concealed in the palm of your hand.

Read on

— Prohibited Weapons Order, No. 8, made by Order in Council P.C. 1979-2141 of August 9, 1979.

The Criminal Code itself includes switchblades and flick knives in the definition of "prohibited weapon" in subsection 84(1). Prohibited weapons can be possessed only by specially licensed businesses, such as those that supply movie productions with a variety of weapons for use in filming or those that supply police with items such as pepper spray.

The only substantive change which is being made to the prohibited weapons class involves pepper spray. Prohibited Weapons Order, No. 1 currently covers devices designed to incapacitate people. This has led to uncertainty in enforcement where devices are marketed as being intended as animal repellents, such as for the control of dogs in urban settings or bears in wilderness areas. The redrafted item — part 3, item 2 — makes it clear that any device that is capable of being used to incapacitate people is a prohibited weapon if it involves tear gas, mace or pepper spray. An exception is made for devices involving pepper spray if they are designed for the control of wild animals, such as bears, and have a capacity of 225 grams or 225 millilitres or more.Smaller pepper spray devices, which are intended for use against people and which come in canisters that are easily concealable, will be clearly prohibited, as it is these devices that pose the major risk of criminal use and the most risk to public safety. Large "bear spray" devices, which have a legitimate use, will be clearly exempted.

The picture you showed is clearly too small and prohibited in Canada because it is too small. Why the Caandian guard gave it back to you to return to the US is beyond me. Maybe she phoned ahead and was hoping there was a more severe penalty in the US.

However, your unit is is clearly legal in every state in the USA.

There do not seem to be any restrictions in Washington State. And the size issue is interesting.

Wisconsin with a population of 5,500,000 will only allow you to have a canister which is between 15 and 60 ml.. Michigan with a poplation of 10,000,000says nothing bigger than 35 grams.

New York State, with a population of 19,000,000, will only allow you to buy it from a Licenced Firearms dealer or pharmacist but has no size restrictions and Massachusetts with a population of 6,400,000 will only allow purchase from a licenced firearms dealer.

With no rules in the other states, any size would seem to be legal.

No wonder we are all confused.

I have not had a chance to talk to anyone at NEXUS. However, I am throwing this out to the newsletter group which has both US and Canadian border people as members to see if anyone wants to offer an opinion and in particular to see if anyone knows of an appeal process.

And this is a warning to anyone else who has bear spray or dog repellent in their car or luggage. For the time being, it would seem to be a good idea to leave it at home if crossing a border. In this case the dog repellent has been in the lady's glove compartment (when she is not jogging) for at least seven years and she crosses the border 4 or 5 times a week.

What is that - 52 x's 4 = 208 times a year x 7 years is 1400 times across the border without a problem.

Another recent client was turned back from the US after about 150 times across the border and I am talking about multi-million dollars of Canadian Investment. That's a real border out there.
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Bankruptcy/Income tax - Murray Morisson - Bankruptcy lawyer

We claimed bankruptcy in Aug/06 and were discharged in May/07,after 9 months meeting all of our obligations with nothing further owing to our trustee. We did sign to have the trustee prepare and keep 2006 tax refunds.   Am I correct in thinking that we are entitled to our post bankruptcy(2007) tax refunds? Also I checked my E-pass account at CRA and found out that the trustee is authorized until Aug/2009.   We thought we had authorized them to represent us in the 2006 bankruptcy year,(as they requested). Were we misled and if so is that legal?   Can we have them removed as our authorized representative now that we have an absolute discharge?   Thankyou

david ingram replies:

In general you are usually entitled to keep your refund from Aug to Dec 31 2006 but if the trusteee did not have enough in the bankruptcy estate to pay their own fees, it is not unusual for them to keep another refund as well,

If you are sure that your agreement for the Trustee to keep the CRA refund was only until the end of 2006, then you should file form T1013

Check the box   2 - A 'CANCEL ALL CONSENTS'

Mail it to:

Tax Centre
9755 King George Highway
Surrey, BC, Canada

Or your local CRA office.

If you cannot find a local address, send it to Surrey and they will look after it for you.

That will remove the trustee as your representative.

The original form you signed automatically gave them a three year time period, and it was not necessarily unreasonable at the time.  Lots of times, a bankruptcy discharge takes two or three years.  My own, for instance went from Aug 13, 2002 until about July 5 2004, almost two years.  When I was in court getting the discharge ruling, another poor fellow was there asking for a discharge after six years.

However, although traumatic to start with, the bankruptcy was one of the two or three best things that ever happened to me and I will bet that your life has improved since yours.

I cannot encourage enough people to 'pull the plug' and get on with their life.

However, I do have a caveat.   When you go to see a Trustee, no matter how much you like them and no matter how many recomendations you received and no matter how nice their office is, as soon as you sign those papers, that trustee is working for the creditors.

As they say on television, anything you say to the trustee can and WILL BE used against you later if it was the wrong thing to say under the circumstances.  If you have a question and ask the trustee, it might be the wost thing you could have asked.

Every person in bankruptcy needs an ADVOCATE and that person is NOT your trustee. 

I recommend Murray Morrison in Surrey as an advocate in the Lower Mainland of BC. - his phone number is (604) 930-9013.

The following is the article I wrote about my own bankruptcy for the Western Investor.  And that is another point.  If you go bankrupt, do NOT try and keep it a secret.  If you do and it leaks out, it is a tremendous embarrassmnet.  Tell your experience to family and friends - it might help them out.    . 

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selling rental property to son

QUESTION: My husband and I own 3 rental properties-should we have a corporation to save on taxes?  Also our son wants to purchase one of our homes (we claimed it as a rental on our taxes) do we have to sell it to him at fair market value or can we give our child a deal?

  david ingram replies:

In my opinion, you should not have a corporation.  A persoanl holding company corporation usually ends up owing MORE tax and the accounting is even worse.

You can sell to your son for any price you please.  However, because it is a non-arms length transaction, you still have to treat it as sold at  a fair market value on your returns and pay tax as if you sold it for full price. 

Your son will also want the higher price for his records to cut his tax in the future.  So sell it at full price and waive the down payment or some other amount as a gift.

There is no gift tax in Canada.  Remember as well, that ifyou have claimed CCA (capital cost allowance or depreciation) on the house sold to your son, you have to recapture that depreciation and pay tax on it now by putting the recaptured amount on schedule T776.

The increase in value of the unit is taxable by putting the amounts on schedule 3 -

Then, by following the form to the bottom you will see that

One half of the increase in value of the unit goes on line 127 as taxable income. �
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Canadian citizen buying house in USA


1. Can a Canadian citizen with business in Canada buy vacation house in USA.         2. What are complications associated with tax and getting mortgage for such property.

david ingram replies:

1.    Providing you do not have a criminal record which would stop your going to the USA, there is no reason why you can not buy a vacation home in California, Arizona, Texas, Florida, Alaska or any other US destination if you can afford it.

2.   I usually recommend that you borrow half in Canada and half in the US.  That will always qualify you for the US mortgage and you are moderately protected from foreign exchange which can be devestating. Use your Canadian house as security for the half down in the US. And, of course, the same thing is true in reverse. 

When you go to sell, you will pay tax first in the US (and maybe a state tax in California, Arizona, South Carolina, Vermoont, etc.)

This older question may help




My wife and I are looking at possibly purchasing a condo in Palm Springs for our retirement. We are both 50 years old and plan on working for the next 7 or 8 years. Our plan is to purchase and use it a few times a year and rent/lease it out for the remainder of the year until we reach retirement at which time we would spend 4 or 5 months a years there. Looking for some advice on what we should be looking out for and what would be a better choice mortgage wise, U.S. or Canadian funding. Or is it a good idea at all to purchase U.S. real estate as a Canadian? Any advice or literature that's out there that you could direct us to would be greatly appreciated. Thanks!

xxxxx xxxxxxxx ------------------------------------------------------------------------
david ingram replies:

If your intention is to start spending significant time there, buying now is extemely sensible because you are buying it at today's price which will logically go up in the futre.  You 'are' of course, also dealing with exchange.

Since your earnings are in Canadian dollars, borrowing the money in Canada and paying cash in palm Springs means that you wil be paying in a known currency.

To explain that statement, persons who bought in 1991 with a US mortgage paymnet of $1,000 needed $1,145.87 Canadian dollars to make the payment.  By 2001, they needed $1,548.62 to stay even.

However, in reverse, if you bought in 2002, you needed 1,570.36 and only need about $1,060 to stay even today.

Currency exchange does go both ways.

You might want to borrow half in Canada and take out a mortgage for half in Palm Springs.

If you are renting the property, you will both need to file a US Federal 1040NR with Shedule E and California 540NR return and then change the currency  to Canadian and file form T776 with your Canadian T1 returns.  Failure to file the form 1040NR can have penalties of $1,000 to $10,000 per year per return per person even if you lose money.  A very real problem is that all sorts of Canadians approach a US accountant and ask about filing and are told they do not need to file a return because they are losing money.  Not so.  When it comes time to file, hunt down a specialist in dual country tax returns like Gary Gauvin in Dallas,, Steve Peters in Halifax, Kevyn Nightingale in Toronto, Brad Howland in Victoria or myself in Good Olde North Vancouver.

Whatever you do, do NOT buy it in a corporate name. You will not save anything and end up with another $2 or $3,000 of accounting fees.

You will also need to file personal US tax returns if you are there more than an average  of 120 days a year.

The following is from my April 1994 newsletter which you can find at in the top left hand box.  Note that it was written in 1994 and still appropos today.


April 1994        Pages 35-43


david ingram's US/Canadian Newsletter


I recently received a copy of a newsletter from a Canadian enclave in the State of Washington. The newsletter dealt with the possible requirement to file a US tax return by Canadians who have recreational property in the US. In this particular case, there are some 2,000 Canadian members of this one enclave and there are another 30 to 40,000 estimated Canadian owned recreational properties in the US within a three hour drive of Vancouver.

The newsletter was very accurate in explaining the "rules" but bothered me because it dealt mainly with fear of filing rather than with the logical solutions.

Let me explain

There is nothing new about the requirement of a Canadian Snowbird to file a US tax return if they are in the US too many days.

Many of you will remember when Howard Hughes came to live at the BAYSHORE INN. For six months we were titillated with Howard Hughes stories and the speculative question among tax consultants was: "Would he stay more than 183 days?"

The answer was "NO". He left Vancouver (and Canada) on the 181st or 182nd day because if he had stayed just one more day, he would have become taxable in Canada on his WORLD INCOME.

The United States had and has the same 183 day rule as does Great Britain, Australia, New Zealand, etc. The difference is found in how the United States has calculated the 183 days since 1984. That's right, these supposedly new rules are now just about 10 years old. What has changed is the stepped up enforcement of ten year old existing tax laws.

If you are in the US more than 183 days this year, you are taxable on your world income. But it can also sneak up on you in the following way.

The United States calculates the 183 days for THIS year by counting some of the days for the preceding two years if you have been in the US for more than 30 days in the current year.

So, if you have been in the US for 126 days a year for this year and the last two years, the calculation is:

1993 126 days

1992 (1/3 of 126 days) 42 days

1991 (1/6 of 126 days) 21 days

For a total of 189 days

and you are taxable on your world income unless you can prove you have a closer connection to another country.

You might want to and even be able to prove you have a closer connection to Canada by filing a form 8840 but "why bother" when filling out the tax return itself is easier and leaves you free to "live your life".

On the other hand, filling out the 8840 just leaves a list of people for the IRS to look at and will leave you paranoid. Filling out the tax form is usually relatively painless (if you deal with my office, that is), and leaves you free to join a golf club and be in (and out of) the US for 189, 210 or maybe even 300 (under these extended rules) days as long as you have a full blown home waiting for you in Canada or any other country.

US "IMMIGRATION" laws say that a Canadian can be a visitor for up to six months. That literally means that you can go across the border to your cabin, chalet, trailer pad, ranchette, condo or sailboat in Elliott Bay, stay there for 180 days, come back to your home in Canada for a day or a week or two, and go back for another 180 days.

US "INCOME TAX" law says that if you do that, you have to file an American Tax Return. So what! 150,000,000 other people file a US tax return every year and they have to "PAY" tax to the US. If you have already paid full tax to Canada and if all your income comes from Canada, the US rules allow a foreign tax credit for the tax paid to Canada. There is usually zero tax for the Canadian to pay to the US.

At "up to $40,000 US" for a couple, there is usually no tax payable to the US. After $40,000 per couple, an Alternative Minimum Tax can creep in. But do not worry. At $80,000 US, it will not be over $600.00. And, if you do not mind me saying so, if you are in the US for half the year, and you made over $80,000 US (about $105,000 Canadian), you can afford to pay $600.00 to the US.

If you do not want to pay the Alternative Minimum Tax of $600, there is another simple solution which you should have done anyway. Make sure you have some investment income from the US. Say about $6,000 to $10,000. This will generate a tax liability to the US First (don't worry, Canada will give you credit for every cent paid to the US and reduce your Canadian tax accordingly). Alternative Minimum Tax usually only kicks in when you aren't paying the US any tax.

What are the advantages of the david ingram method of dealing with these regulations?

A. You are free to come and go without worrying about the "tax man".

B. By having some of your wealth in the US, you are hedging your retirement dollar.

C. You can join the library, golf club, ski club, buy all the furniture you want, buy a golf cart, and just plain enjoy your surroundings.

D. You will be forced to deal with your medical insurance. At the moment, all sorts of SNOWBIRDS believe they have coverage under the Canadian Medical Services plans while they are spending most of their time in the US. LET ME WARN YOU HERE. POSSESSION of a BC MEDICAL CARD does NOT mean you are covered. BC MEDICAL routinely cancels medical insurance RETROACTIVELY when their investigators find a person sleeping in the United States more than 183 days a year. BC Medical, OHIP, New Brunswick and every other provincial medical plan all insist that you "SLEEP" in that PROVINCE more than 183 nights to qualify for their medical plans.

E. You will not have to come up with detailed answers for the 8840 which has questions like:

19. Where were your personal belongings, furniture, etc. located?

20. List social, cultural, religious, and political organizations you currently participate in and the location of each:

a __________________________ Location ___________________________________

b __________________________ Location ___________________________________

c __________________________ Location ___________________________________

d __________________________ Location ___________________________________

e __________________________ Location ___________________________________

>>>>>>>>>(10 other questions>

31 List any charitable organizations to which you made contributions and their location.

a __________________________ Location ___________________________________

b __________________________ Location ___________________________________

c __________________________ Location ___________________________________

d __________________________ Location ___________________________________

F. By filing as a "resident for tax purposes" of the United States, you should escape inheritance tax on amounts of over $60,000. (changing with new treaty)


A. You have to file an extra tax return. But so do residents of Quebec and you are getting cheaper gas, eggs, milk and turkeys.

B. No others that I can think of.

The following is a copy of a "SNOWBIRD" article I wrote back in 1992 and which seems appropriate about here.


The US government is starting to enforce long standing rules against Canadian SNOWBIRDS, and, to be sure, anyone else who spends a lot of time in the US. It can more easily apply to someone who has a cabin in the San Juan Islands or a summer (winter) cabin at Birch Bay, Point Roberts or Mount Baker as it can someone with the place in Palm Springs or Arizona.

In particular, if you rent that cabin out during the year, you MUST file a tax return as well. Failure to report even $600 rent can result in an automatic tax of 30% of the gross with no expenses allowed AND penalties plus a fine of (are you ready for this?), up to $10,000 for failing to file the tax return "EVEN THOUGH YOU LOST MONEY IN THE RENTAL PROCESS".

But back to SNOWBIRDS (or summer visitors who go back and forth a lot to shop, etc.).


Take the days present this year - let's say 130 days

add 1/3 of the days in the previous year

and if that was 120 we get another 40 days

plus 1/6 of the days present two years previous

and if that was another 120 we get 20 days

for a total of: 190 days

and we are now taxable in the US on our "WORLD" income. i.e., the person must report his or her Canadian Pensions, interest, dividends, rents, farming and capital gains income to the US as well as Canada.

The person is taxable in other words, even if no income is coming from the US simply because of physical presence. Canadians will remember back in 1977 when Howard Hughes was ensconced in the Bayshore INN. He left town on his 182nd day because Canada would have taxed Howard on his world income if he had stayed 2 more days.

It is possible to avoid this by filing a "DECLARATION OF CLOSER CONNECTION TO CANADA" with the IRS Service Centre, Philadelphia, PA, 19255. This Declaration would state that your family, belongings, permanent residence, social and business ties are all in Canada.

The problem is that with time, these ties "move south". The SNOWBIRD has bought a nicer place in Arizona than they have in Nanaimo or Lethbridge. The Snowbird has bought a cheaper US car in Arizona. The Snowbird has rented out their house in Campbell River and is living in a motorhome in Arizona and California in the Winter and travels through Canada in the Summer. The Canadian has taken out a US Visa card and Mastercard. In other words, their centre of influence has moved south and their closer ties are not "definitively" in Canada anymore.

And, if it is half and half or even close to, the US will quite properly want a tax return.

But fear not. File the Canadian tax return first and then file the US tax return and claim foreign tax credits for the tax paid to Canada. Unless the income is over $40,000 US, the tax paid to Canada is usually enough to wipe out any US tax.

If the income is over $40,000 US, there may be a small amount of Alternative Minimum Tax to pay. The problem is US Immigration Department's crackdown on Canadian Snowbirds or "border livers" in motorhomes and other semi-permanent Canadians spending a lot of time in the U.S.

Let me use a few examples:

Situation 1

72 year old woman with a condominium in Phoenix, Arizona. Has been spending every winter in Phoenix for the past ten years. Owns a $400,000 house in Vancouver. She rents the house out every winter and has no phone number in Vancouver "in the book" because her number is disconnected when the phone book closes in January every year.

She is driving down to Phoenix after renting out her house and the INS person at the U.S. Border questions her closely. He decides that she "might" be trying to live in the U.S. and turns her back at the border. He asks for such things as "phone bills", to prove that she lives in Canada and is only "visiting" in the U.S.

Of course, she is in a tough spot. She finds it easy to rent out her Vancouver House for a nominal rent every winter but it is impossible to rent out her Phoenix condominium in the summer when she is not using it.

The question is: "where is she LIVING" and where is she VISITING?

INS has decided that she is now "living" in the U.S. and "visiting" Canada and that is not legal without going through a lengthy immigration process. Banned from the US under these circumstances.

Situation 2:

A 70 year old man who with his wife has had US resident alien cards for some 20 years and has been working in the U.S. for the same twenty years and still is. Owns a house in Vancouver that his mother lives in and a condominium in Los Angeles that he and his wife have lived in for that twenty years.

He has a phone number in Vancouver in the house that his mother lives in and he owns.

His wife is in Vancouver for an extended period looking after his mother. He comes up for a weekend. On the way back through Vancouver Airport, he is questioned by INS. He innocently tells the story to the INS officer who decides that with a phone number in Vancouver and his wife in Vancouver for 19 months, and because he has a BC Medical Card, the person has likely given up his residence in the U.S. and starts to take away his resident alien card. Calmer heads prevail and he is allowed to keep it but told he better straighten out his act. He has made the mistake of having all sorts of Canadian Identification including a B.C. medical Card. There is a "theory" that he is not allowed to have a B.C. Medical card if he is a resident of California. U.S. INS officer reports him to B.C. Medical.

Situation 3

A couple sell their house and buy an expensive Canadian Registered (that is the key to me - if they were not intending to be Canadians, the motorhome would have been $80,000 U.S. cheaper in the U.S.) Beaver motorhome. They spend some time in the U.S. and come home for Xmas and then start off to tour some more. They have been told by a 100 people that they can be in the U.S. as visitors for up to 183 days legally.

After Xmas, they leave to go south at Huntington Crossing and are told that they cannot enter as they cannot prove that they "LIVE" in Canada. Their mailing address is their daughter's house and they have no phone number, etc. Their vacation - retirement - snowbirding is ruined as they are not allowed in the US as visitors.

Situation 4

This is out of the Vancouver Sun, I have not met the people.

Another couple sell their home and buy a truck and trailer. They spend some time in the U.S. and come back up to Vancouver to visit. They leave the trailer in Redmond, Washington, and when they go to go back to the U.S. after their Vancouver visit, an INS person at Huntington / Sumas crossing denies them entry on the grounds that they do not have a home in Canada. He is allowed 3 days compassionate leave to get his trailer and return to Canada (again, please note that the truck and trailer are registered in Canada).

Situation 5

A Couple sell their condo in Vancouver and rent another apartment in the same building. They keep the same phone number. They buy a house in Whatcom County and check with an INS officer at the Huntington crossing as to whether they can take some of their furniture down (this book says they can). When they go to visit their house at Xmas, 1991 (two weeks after talking to the INS officer) with a U-Haul trailer full of their excess furniture, they are questioned at the same Huntington Border Crossing by the same INS officer and denied entry. The INS officer asks for such things as address, phone number, etc., and of course, the address in the phone book is different. The house in the U.S. is far nicer than the rented apartment. The house in the U.S. is within commuting distance to the husband's employment.

The INS officer decides they are going to "LIVE" in the U.S. and spend occasional time in Vancouver "if" they even really have a place in Vancouver. They are denied entry to the US with their excess furniture.

Situation 6

A couple with a house in Greater Vancouver and a cabin at Point Roberts are denied access to their cabin before Xmas. They are told by the INS officer that they have been in the U.S. too much in 1991 and to come back in 1992.

Situation 7

A young lady with a boy friend in Seattle whom she visits on a regular basis with no problems is denied entry to the U.S. when she arrives at the border driving a rental car. She shares an apartment in Vancouver with someone and there is no phone in her name. She has stuff in her luggage that indicates she spends a lot of time in Seattle and also has a picture in the car which she is talking down as a present. It "LOOKS LIKE" maybe she lives in Seattle and visits Vancouver.

Situation 8

Same situation, different cities. A young lady with a fiancee working in Chicago for two years flies down to visit him almost every weekend from Toronto. She works for an airline and it costs her virtually nothing do fly down. She shares an apartment in Toronto and has no phone, and little Toronto ID. Even her car is a company car so she doesn't have a car, phone, or apartment in her name even though she has a full time job in Toronto and that is obvious from her business identification and a call to her employer.

The INS officer is not satisfied. he feels she is living with her boyfriend in Chicago and commuting to work in Toronto. She is banned from the U.S. but invited to get proof of her Canadian Residence.

Situation 9

I do not know this couple either. It comes from CTV National News. Couple in Maple Ridge are going to U.S. through the same Huntington crossing. They have been down dozens of times. They are asked if they have ever been arrested. He says no because he has a Canadian pardon. For some reason, the INS people check. He was arrested and charged and convicted 18 years before for the possession of a single marijuana cigarette. HER car is seized. At last word, the car was not being returned and will not be.

Situation 10

Same Crossing. A Vancouver City Policeman who has a criminal charge against him and is under suspension is going across the border with his wife and one other person. His truck is seized for trying to get into the U.S. while under a charge. It also turns out his wife has a criminal record.

You see; it does not matter whether you are asked or not, it is illegal to enter the U.S. if you have a criminal record or have been arrested unless you have a waiver from the U.S. Department of Justice. And, if you are taking someone else across with your car or they borrow your car and drive across the US border without mentioning the charge (even with a waiver form), you lose your car.

Situation 11

Osooyos Crossing, Aug 19, 1992. A couple and their two children and 8 friends are crossing to the U.S. for Mexican Food at Oroville, Washington. They are in a 33 foot motorhome and INS decides to question all people asking where born, what citizenship, where they live, and have you ever been arrested. Driver says yes but not convicted. INS officer takes information and comes back a few minutes later and bans driver from U.S.

INS officer warns all other members of party that they are not to assist driver across U.S. border or they can be arrested themselves. Tells driver "I am sure glad you said YES, or I would have had this motorhome". It took "david ingram" 4 months to get an official waiver to go back to U.S.

You see, an arrest in Canada and either a "Stay of proceedings", or an "Absolute Discharge", or a "Conditional Discharge" is treated by the U.S. as if you were convicted, even if the offense is minor. Getting charged with stealing a loaf of bread can have you banned from the U.S. for life.

The solution is to get a "Canadian Non-Resident Alien Border Crossing Card" and waiver. This costs $80.00 U.S. and requires fingerprinting by the RCMP and FBI but is a relatively painless experience. If you wish more information on this topic, we would be glad to assist. There are also regular advertisements for "Pardons" and "U S Waivers" in the Vancouver Sun and Province. Write for more information to: David Ingram, 201-935 Marine Drive, North Vancouver, B.C., V7P 1S3 or fax to (604) 649-4759 or call (604) 657-8451.

Situation 12

A "highly placed" lady from Ottawa decides to sneak into a class at a University in the U.S. for a semester. She does not bother with the formality of a Student "F-1" visa but just "goes south". She has student cards, library cards, etc. Then she comes up to Canada for a weekend with a fellow lady student from the University (these are not kids, these are 30 year old women). When going back to the U.S. in the U.S. student's car, she is questioned and the U.S. student I.D. is found. She is banned from the U.S.

She has been identified and should know that an INS officer might check later at the U.S. University to see if she has snuck in, BUT she just isn't thinking.

She calls a Canadian Friend and tells her what happened. the Canadian says, don't worry, I'll take you down, we'll just say we are going shopping". The Canadian picks up the Canadian Student and they arrange to meet the American student on the other side of the border. They make it across but the U.S. Border people follow the American car which now is short a Canadian Student.

When they meet at a U.S. Shopping centre to transfer baggage, etc., they are surrounded by U.S. Border patrol cars. All three are arrested and spend 8 hours in jail. $51,000 worth of cars are impounded. The two Canadians are deposited back at the Canadian Side of the border and spend $70.00 on a taxi to get home.

The Canadian car is a lease car with hefty payments. Finally, with the payment of a $2,000 "penalty", the leasing company gets the car back but is told that they may not give it back to the Canadian, nor may they make any special financial arrangements with her on another car. i.e. she is to get no benefit and she is expected to make up any shortfall to the leasing company. I do not know what happened to the American's car. Stay tuned.


Please note that the Canadian Customs are getting tougher every day. In 1989, the borders south of Vancouver seized some 1,000 cars. In 1991, they seized 10,000 cars from returning Canadians and U.S. visitors.

In fact, a drunk driving charge in the U.S. bans a U.S. citizen from Canada for life. The U.S. is far more sophisticated when it comes to waivers and entry of people with problems. Smuggling, particularly cigarettes, firearms, and alcohol will get you severe penalties. It isn't worth it.



Copyright  © 1996-2007 david Ingram

Updated July 25, 2006, All rights Reserved
Cross-border Income Tax Preparation Experts
NAFTA Consultation on Visas, Taxation, Immigration, Cross Border, Canada, USA, Mexico

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GST rebate on exported Motorhome

Hello, I'm hoping you can help me. My husband and I purchased a 2005 Motorhome in the U.S. We imported it, paid the GST at the border and they told us we could get it back. I called Revenue Canada got the B2 form completed it , sent my copies and I received a call from CSBA saying that we were not entitled to get the GST back as we registered the motorhome. We also had a trade-in which we also imported and then exported back to the US. We are trying to get the GST back on the trade-in. Of course there was no reductions on the trade-in.   I think it is the same principal as buying a car here, when you buy a car and have a trade in , you only pay the GST on the difference. When we imported the motorhome, they charge you on the whole balance of the Cdn converted amount .   I would appreciate any advice you can offer, Thank You for your time.   -------------------------------------------------------------------------------
david ingram replies:

Well it sounds to me like you bought a motorhome in the USA and then imported it to Canada and were properly charged GST for the import. 

Then, some time later, you took that motorhome back to the US and bought another 2005 motorhome which you imported.  For Canadian purposes, at that point, it does not matter how you paid for it, the GST is payable on the fair market value (not necessarily what you paid for it) as you cross the border. 

There is no reson that I know of that you would qualify for a refund on either motrohome under those ciircumstances since these were personal purchases and not part of a business. 

I do NOT understand why anyone at the border would tell you that the GST was refundable. GST is due and payable on 'anything' you bring into the country but for practical purposes, they do not charge you GST on any examption you may have had when you entered.

I am also embarrassed that I do not know what the B2 form you filed was.  A 'B200' is an excise tax return you might have filed if you were in business but it does not apply to GST. If you filed this form it was in error becasue it only applies to excise tax and you have to be in business to use it.

GST refunds are only issued to GST registrants (GST34) who are in business as an input credit or non-residents (GST176) who export a vehicle that they bought in Canada.

I hope this helps.  Having bought  7 vehicles into Canada, I wish I knew a method of getting back the GST. 

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Moving to Canada from USA

Hi David, I ran across a posting of yours on the Internet about tax situations in the U.S. versus Canada. I was wondering if you could help me out...
I work from home for a company in Dallas. I want to move to Toronto and live (maybe eventually become a citizen) in Canada. If I move to Toronto, how does my company in Dallas handle payroll? Do I still pay Federal U.S. taxes, but no state or local? What about paying taxes in Ontario and Canada? How is that handled? Any information is greatly appreciated. You can call me or just email me if you have time...

Thanks so much for your time... you seem to be the most knowledgeable person I've come across on the Internet regarding these issues!

david ingram replies:

I will answer this as an email for the newsletter and will not charge for this. If i phoned, I would charge $400.00 Cdn.

And, indeed, if you were living in Dallas, I would have you talk to Gary Gauvin, my old partner who has an office there but I know Cleveland well and stayed in Columbus for a while and was in Cleveland in 1998.

Your first problem is getting into Canada unless you happen to be a Canadian citizen because your mother or father was or you were born here for some reason or other.

If not, you can come to Caanda under our point system (similar to the one which the US just rejected) or you havce to marry a Canadian or you have to get a Canadian job and be sponsored for a working visa by the Canadian company.
This is the self-assessment test for an individual to determine his or her
eligibility to immigrate to Canada without being sponsored by a spouse.

If you do not get 67 points on the self-assessment or find a Canadian job you will need to find a Canadian to marry.

When and after you get here, the easiest way for the Ameircan company to pay you is on a 1099 basis.

You will not owe 'any' US Federal taxes under normal circumstances because the foreign tax credits and/or an earned inocome exemption will knock out US taxes.

You WILL have to pay Canadian CPP (like FICA) and Ontario and Federal Income taxes.

GOTO and read the Oct 1995 newsletter (top left hand box) and the US / Canada Taxation section (second box down on right hand side) for 40 pages of information. You can also read the Oct 1993 newsletter for info about dual citizenship.
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Capital gains from outside of Canada (UK)


Dear Sir/Madam,

I'm selling my former primary residance in the UK.

It is then my intention to bring the money into Canada to buy an investment property.

Will I be paying further taxes?


david ingram replies:

1.   If you bought another house in Canada, any increase in value from the day you arrived in Canada would be taxable.

2.   If you did not buy another house in Canada and have been here 4 years or less and filed your Canadian Rental schedule for the UK house and made a 45(2) election, the house can be tax free in Canada.  I do not have enough information to answer the question.

these older questions might / should help.


My question is: Canadian-specific


Please help.

I bought a Calgary condo in Oct 2003, and lived in the condo until March 2005, when I bought my present house.

The condo was rented from April 2005 to August 2006, and I sold it in Nov 2006, at a gain.

My question: Would I qualify for the Principal Residence exception and be exempted from Capital Gains tax for the condo sale?


Best Regards,

--------------------------------------------------------------------------- __________________________________________________________________
david ingram replies:

I am too busy for this but hope you get something from the following:
>> Hi, 
>> Last year, we rented out our condo in Vancouver.  The
>> plan then was to have the rent cover our mortgage
>> payments for the 12 months that we would be away.  A
>> short term solution.
>> Now, we are planning to be away from BC for a longer
>> period of time (approx. 2 years) and wish to sell the condo
>> in the middle of the year, as we are unable to rent the
>> condo for any longer due to strata council by laws.
>> 1) If we sell the condo when there has been a tenant living
>> in it for 12 months, will we pay capital gains?
>> 2) What are our best options to avoid paying this tax?
>> 3) If capital gains would be owed, for how long would we
>> have to make the unit our principal residence again before
>> we can sell it and not pay CGT?
>> Thank you,
david ingram replies:
If you filed a section 45(2) election with your first year's rental, you 
can rent the condo out for up to 4 years (plus 1 in the calculation) 
without incurring capital gains tax if you have not bought another 
residence that you are living in.

If you have bought and lived in another house, you have to choose one or the other as your tax free residence for the time you owned both.

 See Below:
  My question is: Canadian-specific

QUESTION: Dear Mr. Ingram,
I bought a house in the December of year 2000, lived there till the end of December 2000 (3 weeks) and started to rent it out on January 1, 2001. I filed the election 45(2) to claim the house as my primary residence for years 2001, 2002, 2003 and will do it for 2004.
I do not claim a depreciation for those years.
I want to sell the house now. Do I need to move in house first in order to avoid the payment of the capital gain taxes. For how long I have to stay there to be eligible for not paying the capital gain taxes on sold house if I need to move in.

Thank you in advance for you help,
david ingram replies:    First I am going to repeat your old question from last July and my answer.   My question is: Canadian-specific

QUESTION: Hi, David!
I would like to know is it possible to use the election under the section 45(2) again if the old house is sold and the new one is bought. Can it be used unlimited number of times by the condition that it is used for each house only once.

Thank you  
David Ingram replies:   Section 45(2) is intended to allow people to try something out.  This means that if you move to a rented condo for a couple of years and rent your house out, you can move back into the house without suffering a capital gains tax under section 45(2).   Since it was passed on June 17, 1972, (32 years ago now) I have never seen it used more than twice by one person.   Does not mean it has not been used more than twice in thirty years, it just means it is unlikely.   There is no numeric restriction but if you are moving in and out of houses, the CRA will treat you as a trader and tax you at full rates.   ---------------------------------------------------------- Now, to answer this question.  Section 45(2) is NOT something you can plan to use.  In other words, your living in the house for three weeks and renting it out and filing a section 45(2) election does NOT make it tax free if you bought the house to rent and not to live in as your personal principal residence.   Your question indicates to me that you are trying to beat the system and did not buy the first house to live in and unless you can show the tax office that you moved every stick of furniture in and really intended to live there, the CRA will not allow it to be sold tax free.   This year, a new policy of the CRA is that they wish form T2091 to be filed with every tax return where a personal house was sold during the year.   If it was your residence and you genuinely intended to live there and were transferred of suddenly got married or could not stand your neighbour or lost your driver's licence or suffered some other disaster that caused you to "HAVE TO" move suddenly, filing section 45(2) will make it tax free provided you did not also own another house that you did live in.   If you did own another house that you actually lived in, claiming the house you have filed the 45(2) election for as tax free, will MAKE THE HOUSE YOU ACTUALLY LIVED IN TAXABLE.   If you have a genuine 45(2) election, you do not need to move back in.  If it is not a genuine 45(2), moving back in will TRIGGER a tax bill as you move in.   You need a consultation with someone who knows the rules before you make a mistake. I am available in person or by phone at a fee of $350.00 minimum for an hour but not until November now.   As many know, I charge this for US / Canada tax an immigration advice as well.  I am not alone though.   If you have a tough US immigration question to ask or one that  I cannot deal with (remember I do Immigration AND tax) Joe grasmick is the place to g for a telephone consultation.  HIs fee is $295.00 per HALF hour and you can get hold of him at   I have sent two out of town people to him in the last month where it was obvious to me that the people needed a lawyer as opposed to a consultant..   If you want a free answer for a couple of minutes, remember   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, 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   Local phone calls to (604) 280-0600 - Long distance calls to 1-866-778-0600.   Old shows are archived at the site.