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Sole Proprietor expense


If I have a 9-5 job and want to start a sole prpritership ,can I write off those expenses against my personal income from my 9-5 job even if I am not making a profit yet with the sole propritership?

Thank you
david ingram replies:

Just about.  As long as it is a legitimate business, any losses are deductible against your wages from the District.  You would likely use Canadian form T2124 which you find at -

You will notice a place for office in the home as well which means that you get to calculate a percentage of taxes, mortgage interest or rent But there is an exception if you are not making a profit.

That exception is an office or storage or studio in your home.  Although you can calculate the expense on a square footage basis, you will notice that it is not a deduction unless or until you have a profit in the business.  However, you 'do' get to carry the office in home expense forward until you do make a profit.

Being a sole proprietor can also help make your mortgage interest 100% deductible.  Go to and read the November 2001 newsletter in teh top left hand box.
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Selling rental house and buying vacant land - ROLLOVER tax deferral - NO!!!

My question is: Canadian-specific

QUESTION: We have had a rental home for a couple of years and we are selling it.  We understand if you buy another investment property within 6 months you don't pay the capital gains taxes.  Can we buy an undeveloped lot and will it be viewed as an investment property and thus be able to avoid paying the taxes?  Thanks.

david ingram replies:

Such a rule does not apply UNLESS the property was expropriated by a government authority for a common cause such as a road or even in a couple of cases, a parkling lot for the Burnaby Library amd a parkling lot for the Municipal works yard in Maple Ridge or as is happening right now, the expropriatioon of some 172 houses for the new Greater Vancouver Ring Road.

If ruled a capital gain 50% of any gain on the sale is taxable on line 127 of your T1 Canadian tax return.

And if you were being expropriated, buying vacant land with the proceeds of a rental house would not qualify.  It must be the same kind of property.
An exception which DOES qualify is if the sale is for the business property of an 'active' business.  Therefore if a service station owner (who was operating the service station) sold his property and bought another service station to operate his business, he would qualify for a capital gains roll-over.  However, if he moved out and rented the property for a year and then sold it and bought another station, it would not qualify because it has to be used in his active business and rental property is not considered active UNLESS

there are five full time employees not related to the owners.
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USA Mortgage Interest as a deduction for first time buyer

My question is: US-specific

QUESTION: IRS Publication 936, subheading "Fully deductible interest", category #2 says:

"2. Mortgages you took out after October 13, 1987, to buy, build, or improve your home (called home acquisition debt), but only if throughout 2006 these mortgages......"

My question is: if a first-time home buyer takes out a first mortgage (home acquisition debt) in 2007, will the "throughout 2006" mean "throughout 2007"?


david ingram replies:

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Moved to US with US citizen wife


My wife was born in the US but only spent 3 days there. She has been living in Canada for 45 years until last year. I am a Canadian citizen working in the US on a L1 Visa.

We have been living in xxxxxxxx for the last 18 months. We own a home in xxxx and have been renting it out since we came to the US 18months ago.

My company has asked me to stay, and we are trying to navigate through all the tax implications of doing so. Do we have to pay capital gains tax on our home in Canada if we sell it? Will my wife be liable for taxes to the US forever because she is a dual citizen?

If you have any guidance for us, or can recommend the type of professional we should be talking to we'd appreciate it.

david ingram replies:

You will have been asking questions everywhere and have found out how hard it is to find anyone who can deal with them.

You are, however, a typical client of this office.

1. You should each have filed a section 216(4) tax return on Canadian forms 1159 and 776 to report your retnal income in 2006. That return was due June 30th so is no late and subject to penalty.

2. figures on the T776 ( (fillable) )

and T1159 ( ) should then be converted to US dollars and included on US schedule E, 4562 and 1116.

3. If you sell the Toronto house, you will both need to fill out

forms T2062 ( ) and

T2062A ( )

within 10days of the sale to avoid a $25.00 a day fine (each).

Filling out the T2062 and T2062A forms enables you to have 25% withholding tax on the increase in value fromwhen you left Canada until the date of sale rather than a withholding of 25% of the gross sale price.

Your wife has always been liable to file US income tax returns and both of you must now file froms TDF 90-22.1 - read bottom of form to see fines - a minimum of $10,000 now

and 8891 to avoid penalties of up to $500,000 plus five years in jail for failure to file the TDF 90-22.1 and 35% of the amount in an RRSP plus 5% a year for evcery year you fail to file or conform to the older rules for form 8891.

Your wife should file six years back to avoid significant penalties.

She will always be liable to file US returns.

You should take immediate steps to take out a green card with your wife sponsoring you. That will give you far more job security and the ability to change jobs at will if you want to.

We, of course, provide trhe kind of services you require.
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Can non-resident let parents/relatives live in the apartment?

Dear Sir / Madam,   I found your info on the Internet.   I am a Canadian citizen, but non-resident.  I wonder if it is possible for me NOT to rent out my apartment in Canada, but instead let my parents/relative to live there?  Is this possible under the non-resident law?  If you can direct me to reliable source on the Internet, I would also greatly appreciate.   Your assistant is very much appreciated.   Sincerely --------------------------------------------------
david ingram replies:

If you are going to a non-tax treaty country, you should not have a blood relatve or good friend (non-arms length) stay in your apartment.  You CAN keep the apartment, but must rent to strangers.

If you are going to a tax treaty country such as Germany or the US or a high tax country like Libya, it does not matter because either Article IV of the tax treaty will protect you from Caandian Tax or the high tax in Libya will give you a large enough foreign tax credit that there will be very little or no tax.

The following Article IV is pretty generic and will / should  give you a better idea I hope: After Art IV see an excerpt from myold book.

Article IV Residence 1.  For the purposes of this Convention, the term "resident" of a Contracting State means any person that, under the laws of that State, is liable to tax therein by reason of that person's domicile, residence, citizenship, place of management, place of incorporation or any other criterion of a similar nature, but in the case of an estate or trust, only to the extent that income derived by the estate or trust is liable to tax in that State, either in its hands or in the hands of its beneficiaries. For the purposes of this paragraph, an individual who is not a resident of Canada under this paragraph and who is a United States citizen or an alien admitted to the United States for permanent residence (a "green card" holder) is a resident of the United States only if the individual has a substantial presence, permanent home or habitual abode in the United States, and that individual's personal and economic relations are closer to the United States than to any third State. The term "resident" of a Contracting State is understood to include:

    (a) the Government of that State or a political subdivision or local authority thereof or any agency or instrumentality of any such government, subdivision or authority, and


      (i) a trust, organization or other arrangement that is operated exclusively to administer or provide pension, retirement or employee benefits; and

      (ii) a not-for-profit organization

    that was constituted in that State and that is, by reason of its nature as such, generally exempt from income taxation in that State.

2. Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined as follows:

    (a) he shall be deemed to be a resident of the Contracting State in which he has a permanent home available to him; if he has a permanent home available to him in both States or in neither State, he shall be deemed to be a resident of the Contracting State with which his personal and economic relations are closer (centre of vital interests);

    (b) if the Contracting State in which he has his centre of vital interests cannot be determined, he shall be deemed to be a resident of the Contracting State in which he has an habitual abode;

    (c) if he has an habitual abode in both States or in neither State, he shall be deemed to be a resident of the Contracting State of which he is a citizen; and

    (d) if he is a citizen of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.

3.  Where by reason of the provisions of paragraph 1 a company is a resident of both Contracting States, then if it was created under the laws in force in a Contracting State, it shall be deemed to be a resident of that State. Notwithstanding the preceding sentence, a company that was created in a Contracting State, that is a resident of both Contracting States and that is continued at any time in the other Contracting State in accordance with the corporate law in that other State shall be deemed while it is so continued to be a resident of that other State.

4.  Where by reason of the provisions of paragraph 1 an estate, trust or other person (other than an individual or a company) is a resident of both Contracting States, the competent authorities of the States shall by mutual agreement endeavor to settle the question and to determine the mode of application of the Convention to such person.

5.  Notwithstanding the provisions of the preceding paragraphs, an individual shall be deemed to be a resident of a Contracting State if:

    (a) the individual is an employee of that State or of a political subdivision, local authority or instrumentality thereof rendering services in the discharge of functions or a governmental nature in the other Contracting State or in a third State; and

    (b) the individual is subjected in the first-mentioned State to similar obligations in respect of taxes on income as are residents of the first-mentioned State.

The spouse and dependent children residing with such an individual and meeting the requirements of subparagraph (b) above shall also be deemed to be residents of the first-mentioned State.

EXCERPT FROM my Border Book published in 1991 and still valid here.

So what are the rules?

Well, to leave Canada for tax purposes, you must give up clubs, bank accounts, memberships, driving licences, provincial health care plans, family allowance payments (if you are a returning resident, you can continue to get Family Allowance out of the country), your car, and furniture. You can keep a house here as an investment and rent it out, but it must be rented on lease terms of a year or more. And you MUST have an agent sign an NR6 for you (see example). This NR6 has the Canadian Resident AGENT ** guarantee the Canadian Government that if YOU do not pay your tax to Canada, the AGENT WILL. Even after fulfilling the foregoing, the Canadian government can still tax you or "try" to tax you on your income out of the country. If you are being paid by a Canadian Company, they can quite often succeed.

Even though you can collect family allowance out of the country, don't! One client's wife found out that she could get family allowance out of the country if she said they were coming back to Canada. She got some $3,000 of family allowance and cost the family some $80,000 in income tax when they came back to Canada from Brazil. I will never forget the husband's expression when he found out why he had been reassessed and I will never forget his wife's explanation. She said he was a skinflint and never gave her any money. The total episode cost them their house.

** The "agent" referred to above can be a friend, relative, or a business such as ours. We charge a minimum of $40.00 per month to be an "AGENT" for an NR-6 filing. This $480 per year is "in addition" to any other fees but "well worth it" of course. It stops your mother, father, brother, next door neighbour or ex-best-friend from being plagued by paperwork they do not understand.


It is possible to be physically "in Canada" and be treated as a Non-Resident and it is possible to be out of the country for seven years, or never have even lived in Canada, but wanted to, and be taxed as a Canadian resident as the following three cases show. In case you missed it, the reason for the different rulings is the "INTENT" of the parties involved.  Wolf Bergelt intended to leave Canada.  David MacLean was only working out of the country.  He still maintained a residence and could not ever become a resident of Saudi Arabia anyway. Dennis Lee "wanted" to live in Canada.

In 1986, Wolf Bergelt won non-resident status before Judge Collier of the Federal Court, even though he was only out of the country for four months and his family stayed behind to sell his house. He had given up his memberships, kept only one bank account and rented an apartment in California until his house in Canada was sold. Four months after his move, his company advised him that he was being transferred back to Canada. Judge Collier said his move was a permanent (although short) move and he was a non-resident for tax purposes for those four months.

In 1985, David MacLean lost his claim for non-residence status even though he was gone for seven years. He kept a house and investments in Canada and returned a couple of times a year to visit parents. He had even been to the Tax Office and received a letter on January 29, 1980 stating that his Canadian Employer could waive tax deductions because he was a non-resident. However, he did not advise his banks, etc. that he was a non-resident so that they would withhold tax, he did not rent his house out on a long term lease and he did not do any of the things that makes a person a "NON-RESIDENT". Judge Brule of the Tax court of Canada said that he thought Mr. MacLean had stumbled on the non-resident status by chance rather than by design. In other words, to become a non-resident of Canada, you must become a bone fide resident of another country.  As a rule, only a Muslim born in Saudi Arabia to Saudi Arabian parents can become a Saudi Arabian citizen.  The best that David MacLean can hope for is that he has a Saudi Arabian temporary work permit.

In other words, when a person leaves a place, they usually leave and establish a new identity where they are because the "new place" is where they live now. Trying to "look" like a non-resident is not the same as "BEING" a non-resident - think about it.

In 1989, Denis Lee won part but lost most of his claim for non-resident status. He was a British Subject who worked on offshore oil rigs. He maintained a room at his parents house in England and held a mortgage on his ex-wife's house in England. For the years 1981, 82 and 83 he did not pay income tax anywhere. in 1981 he married a Canadian and she bought a house in Canada in June of 1981. On September 13, 1981, he guaranteed her mortgage at the bank and swore an affidavit that he was "not" a non-resident of Canada. [As I have said in the capital gains section of this book, bank documents will get you every time.] During this time he had a Royal Bank account in Canada and the Caribbean but no Canadian driver's licences or club memberships, etc.

Judge Teskey said:

"The question of residency is one of fact and depends on the specific facts of each case. The following is a list of some of the indicia relevant in determining whether an individual is resident in Canada for Canadian income tax purposes. It should be noted that no one of any group of two or three items will in themselves establish that the individual is resident in Canada. However, a number of the following factors considered together could establish that the individual is a resident of Canada for Canadian income tax purposes":

  • - past and present habits of life;

  • - regularity and length of visits in the jurisdiction asserting residence;

  • - ties within the jurisdiction;

  • - ties elsewhere;

  • - permanence or otherwise of purposes of stay;

  • - ownership of a dwelling in Canada or rental of a dwelling on a long-term basis (for example, a lease of one or more years);

  • - residence of spouse, children and other dependent family members in a dwelling maintained by the individual in Canada;

  • - memberships with Canadian churches, or synagogues, recreational and social clubs, unions and professional organizations (left out mosques);

  • - registration and maintenance of automobiles, boats and airplanes in Canada;

  • - holding credit cards issued by Canadian financial institutions and other commercial entities including stores, car rental agencies, etc.;

  • - local newspaper subscriptions sent to a Canadian address;

  • - rental of Canadian safety deposit box or post office box;

  • - subscriptions for life or general insurance including health insurance through a Canadian insurance company;

  • - mailing address in Canada;

  • - telephone listing in Canada;

  • - stationery including business cards showing a Canadian address;

  • - magazine and other periodical subscriptions sent to a Canadian address;

  • - Canadian bank accounts other than a non-resident account;

  • - active securities accounts with Canadian brokers;

  • - Canadian drivers licence;

  • - membership in a Canadian pension plan;

  • - holding directorships of Canadian corporations;

  • - membership in Canadian partnerships;

  • - frequent visits to Canada for social or business purposes;

  • - burial plot in Canada;

  • - legal documentation indicating Canadian residence;

  • - filing a Canadian income tax return as a Canadian resident;

  • - ownership of a Canadian vacation property;

  • - active involvement with business activities in Canada;

  • - employment in Canada;

  • - maintenance or storage in Canada of personal belongings including clothing, furniture, family pets, etc.;

  • - obtaining landed immigrant status or appropriate work permits in Canada;

  • - severing substantially all ties with former country of residence.

"The Appellant claims that he did not want to be a resident of Canada during the years in question. Intention or free choice is an essential element in domicile, but is  entirely absent in residence."

Even though Dennis Lee was denied residency by immigration until 1985 (his passport was stamped and limited the number of days he could stay in the country) and he did not purchase a car until 1984, or get a drivers licence until 1985, Judge Teskey ruled that he was a non-resident until September 13, 1981 (the day he guaranteed the mortgage and signed the bank guarantee) and a resident thereafter.

My point is made. Residency for "TAX PURPOSES" has nothing to do with legal presence in the country claiming the tax. It is a question of fact. My thanks to Judge Teskey for an excellent list. The italics are mine and refer to the items which I usually see people trying to "hold on to" after they leave and are trying to become non-residents. No single item will make you a resident, but there is a point where the preponderance of "numbers" leap out and say, "He / She is a resident of Canada, no matter what he / she says." 

The case above is not unusual in any way. It is a fairly typical situation in my office.

In 1990, John Hale was taxed as a resident on $25,000 of directors fees he had received from his Canadian Employer and on $125,000 he received for exercising a share stock option given to him when he had been a resident of Canada (the option, not the stock). Judge Rouleau of the Federal Court ruled that section 15(1) of the Great Britain / Canada Tax Convention did not protect the $125,000 as it was not "salaries, wages, and other remuneration". It was, however a benefit received by virtue of employment within the meaning of section 7(1)(b) of the act.

Even a car you do not own can make you a resident as the next sailor found out.

In 1988, FrederickReed was claimed by the Canadian Government as one of their own. He lived on board ship and shared an apartment with a friend in Bermuda but only occasionally. He also stayed with his parents in Canada when visiting his employer in Halifax. Judge Bonner of the Tax court ruled that he could not claim his place of employ or the ship as his residence and just because he did not have a fixed abode, did not make him a non-resident. He was also the beneficial owner of a car in Canada which even though of minor consequence, served to add to his Canadian Residency. He had in fact borrowed money from a credit union to buy the car, even though it was registered in his father's name. He had maintained his Canadian Driver's licence as well.

An interesting case in June, 1989 involved Deborah and James Provias who left Canada in October of 1984. They had sold a multiple unit building to James' father on September 21, 1984 but the statement of adjustments did not take place until December 1, 1984. They tried to write off rental losses and a terminal loss against other income as `departing Canadians'. Judge Christie of the Tax Court ruled that they had left before the sale and were not entitled to the terminal loss or another capital loss as these could only be applied against income earned in Canada from October 13, 1984 (the day they left) to November 30, 1984 (the day before the sale) and there was no income, only a rental loss.

But June, 1989 was a good month for Henry Hewitt. He had been a non-resident living in Libya for four years and received some back pay after returning to Canada. DNR tried to tax him on the money but Judge Mogan of the Tax Court came to the rescue. He ruled that although Canadians were usually taxable on money when received, that assumed that the money itself was taxable in Canada, which was not true in this case.

In 1989, James Ferguson lost his claim for non-residency status but from the information, it didn't stand a chance anyway. He had been in Saudi Arabia on a series of one year contracts for four years. His wife remained employed in Canada, and he kept his house, car, driver's licence, union membership, and master plumber's licence. Judge Sarchuk ruled that he had always intended to return to Canada and was a resident.

A similar situation involved John and Johnnie M. Eubanks in the United States. He was working on an offshore oil rig in Nigeria with a Nigerian work permit and attempted to claim non-resident status for the purposes of exempting the foreign earned income exclusion. His wife was in the United States at all times and because he worked 28 days on and 28 days off, he returned to the U.S. for his rest periods using 4 days for travel and 24 days for rest with his family. He did not spend any 330 day period (out of a year) in Nigeria and only had a residency permit for the purposes of working in Nigeria. Judge Scott ruled he was a resident of the U.S. and taxed him some $20,000 with another $6,000 penalties and interest.

The Tax departments in Canada and the U.S. issue Interpretation Bulletins and Information Circulars and Guidance Pamphlets. These documents sometimes get people in trouble because the individual reads the good part and doesn't pay any attention to the exceptions. The following case ran contrary to a Guidance Pamphlet issued by the IRS.

On and Off-shore Oil rigs were involved with William and Margaret Mount and Jesse and Mary Wells. William and Jesse worked in the United Arab Emirates. However, they kept their homes and families in Louisiana and kept their driver's licences in Louisiana and voted in Louisiana. No evidence was shown that they had tried to settle in The United Arab Emirates. Judge Jacobs turned down claimed exclusions of approximately $75,000 each.

There isn't any question about what oil rig people talk about on oil rigs. It has to be "how to beat the tax man". Unfortunately, they all seem to think it is easy. Another such story follows.

In 1989, Clarence Ritchie found out that bona fide residence means just what it says. You cannot be a non-resident of the U.S. for tax purposes if you are not a bona fide resident of another country. He was working on the Mobil Oil Pipeline in Saudi Arabia and although when he left he was married with a couple of kids, by the time he returned permanently, he was a happily divorced man. Judge Scott ruled that though he did not have an abode in the United States, he had not established one in Saudi Arabia and therefore was not entitled to the foreign earned income exclusion which requires you to be away for 330 days out of 365. He had worked a 42 days on, 21 days off schedule and usually returned to the U.S. for his days off although he did spend time in Tunisia, England, Italy and Greece.

On a final note, as explained on page 143 of the "PINK" 17th edition of my ULTIMATE TAX BOOK, it is possible to have three countries after you for tax. If you are thinking of taking a job because a recruiter told you the money is tax free, think twice and check three times with competent individuals about what the rules "really are". No government likes giving up the right to tax its citizens.


Non-residents of Canada with investments in Canada are subject to a 25% non-resident withholding tax on any money paid to them while they are out of the Canada. Therefore, if they have $10,000 in the Bank of Montreal and they live in Argentina, The Bank of Montreal must withhold 25 cents out of every dollar of interest paid to the account. Most tax treaty countries such as Great Britain, Germany, the United States, and Australia have a reciprocal agreement with Canada that limits the withholding to 15%. So we have the anomaly that a Canadian with money in a bank in the U.S. has no withholding but an American with money in a Canadian Bank has 15 cents out of every dollar withheld as a foreign withholding tax. The American would report his interest on schedule A of his 1040 tax return and claim the tax withheld as a foreign tax credit on a form 1116.


More important perhaps is the problem with rental properties in Canada. When owned by a non-resident, they are subject to a 25% withholding (or 15% if living in Bangladesh) tax. If the renter does not pay this tax,  the government can come along two years later and demand the tax.

Imagine the consternation of a tenant of a house in the British Properties in West Vancouver, or Rosedale in Toronto. Assume the tenant has been paying $2,000 a month for a $500,000 house owned by a Hong Kong resident. After three years of paying $24,000 a year to the `non-resident', they finally buy a house and move. Two months later, there is a knock on the door and a National Revenue representative is standing there demanding 25% of $72,000 for NON-RESIDENT withholding tax (this is a true story by the way, only the owner was in London).

There is a way around this problem. The tenant can ask to see, or rather DEMAND to see a copy of the landlord's filed and accepted NR6 form. (See forms in back of book). This form allows the tenant or agent of the landlord to deduct a lesser amount (or nil if a loss) than 25% of the gross rent. It allows for expenses to be taken off and the tax can then be withheld at 25% of the net, rather than the gross. The property management division of david ingram & Associates Realty Inc. files about 300 of these NR6 forms a year. (This is only necessary if you are paying directly to a landlord whom you KNOW to be a non-resident of Canada.  If you are paying to an agent or Canadian Resident, you are okay.)

Please note, the NR6 MUST BE FILED BEFORE the first rent cheque is received or 25% of the gross rent must be remitted. For years, we were in the habit of filing `this years' NR6 late with last years tax return. In 1989, National Revenue stopped accepting this sloppy practice and demanded them on time.

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Income Taxes in Canada - ARTicles XIV & XV


I spent time in Canada working as a consultant, but never more than 180 days in any one year.  Taxes in the amount of 24% were taken out for Canadian income taxes, but I have been trying to get back since I paid taxes in the United States as well.

I thought this was taking care of by the NAFTA rules on taxation.

david ingram replies:

Your tax situatiion is dealt with by Article XIV or Article XV of the US / Canada Income Treaty. 

Under Article XIV, you would be tax free in canda as a self employed person if you had no fixed base of operations.  That would mean that you continued to live in the US and came up here and stayed in different hotels or motels and workd from home, etc with no fixed base in Canada.  If on the other hand, you rented an apartment for 5 months (where you did a lot of y9ur work) or you had a desk and fixed place to work at in the company office for which you were consulting, you would have a fixed base and owe Canada income tax which would be more than 24% on paret of it if you earned over $36,000 in Canada.

Article XIV Independent Personal Services Income derived by an individual who is a resident of a Contracting State in respect of independent personal services may be taxed in that State. Such income may also be taxed in the other Contracting State if the individual has or had a fixed base regularly available to him in that other State but only to the extent that the income is attributable to the fixed base.

If you were an employee, then you were tax free in Canada if you earned less than $10,000,  but taxable on all of it if over $10,000 Article XV Dependent Personal Services 1.  Subject to the provisions of Articles XVIII (Pensions and Annuities) and XIX (Government Service), salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.

2.  Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in a calendar year in the other Contracting State shall be taxable only in the first-mentioned State if:

    (a) such remuneration does not exceed ten thousand dollars ($10,000) in the currency of that other State; or

    (b) the recipient is present in the other Contracting State for a period or periods not exceeding in the aggregate 183 days in that year and the remuneration is not borne by an employer who is a resident of that other State or by a permanent establishment or a fixed base which the employer has in that other State.

3.  Notwithstanding the provisions of paragraphs 1 and 2, remuneration derived by a resident of a Contracting State in respect of an employment regularly exercised in more than one State on a ship, aircraft, motor vehicle or train operated by a resident of that Contracting State shall be taxable only in that State.

In either case, you have to file a Canadian Tax return.

And, all is not lost.  If you end up leaving some or all or even a little more tax in Canada, you will get credit for it on your US 1040.  Put the amount of tax paid to Canada on US form 1116. You shouild get credit for all of it or at least most of it against any US tax you paid on a dollar for dollar basis.
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sharing house with parents on title only

My parents are buying a new place and will be adding my name on the house. I will not live in it because I have my own principal residence. However I will be paying the mortgage. The mortgage is under 3 names as the property is under 3 names. When they sell this house (which will be their principal residence), do I have to pay tax on it ? What's that tax consequence on my part?
Thanks for your input.

david ingram replies:

If your parents are buying the house and putting your name on the title for estate purposes and you do not consider it your houe or your asset and will not pledge your "share" as security or list it on a balance sheet and they get all the money if and when it sells, then you do not have a tax problem even if you are making the mortgage payments as a gift or a loan to your parents.

However, if you are going to get a share of the profits if and when the house is sold, then your share will be taxable as a capital gain.

You should have a separate agreement drawn yup to that effect. 

i.e. you will not pledge it as secuirity and have no claim on any money from the house if and when sold.

It wouold be permisable in those cirumstances for the payments you have made to be returned dollar for dollar (or less) but do not take 'any' profit or interest calculation. 
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income amounts in 1994 newsletter seem outdated

You often suggest that we read your April 1994 newsletter but it's important that we know if the income amounts are curent. You say it "was written in 1994 and still appropos today."  But the way it is written, the allowance of maximum income is not clear if it's $40,000 per individual & $80,000 per couple...either way, these seem to be low in 2007 terms .  Is there an update in amounts?

This is what the newsletter says:

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. ---------------------------------------------

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Hummer Tank can feed a person for a year

General News Alternate Fuels as an Investment   Jim Letourneau ( )  is a Calgary newsletter publisher on oil and gas energy for Tom Allen's Howe Street Media (  Jim was telling the world to buy Uranium a couple of years ago at $12.00 and it is now over $75.00, so he does not just stick to oil and gas.    I asked him about ethanol and he made the statement that you could feed a person for a year with the amount of corn it would take to make enough ethanol to fill a Hummer..  This was his follow-up to that statement.     It goes along with my look at 'on board' hydrogen generators for your car, another intersting idea you can see at (  or )
david ingram
Jim Letourneau, P.Geol. wrote: David:

Thanks again for the fun interview at the Vancouver Cambridge House
show. I couldn't remember Lester Brown as the source of the "feed a
person for a year or fill up a Hummer" anecdote.

Of course maybe he made that up so I did some quick research:

How much corn is needed to make ethanol?
For every one bushel of corn, approximately 2.7 - 2.8 gallons of
ethanol is produced.

The Hummer HI has a 53 gallon tank which means that 19.27 bushels of
corn are used to fill the tank at 2.75 gallons/bushel.

Corn can weigh anywhere from 45-70+lbs/bushel. Using 56 lb/bushel
( leads to 1079
lbs of corn being used to fill a hummer tank.

An ear of corn weighs anywhere from 5.4-9.6 oz. so if we use an 8oz
ear of corn we get 2158 ears of corn. That would give a corn eater 5.9
ears a day to live on.

There is certainly room for tinkering with these numbers but I think
the numbers make sense.

take care,


david ingram replies

I looked up a couple of sites as well because of your comment and found a dozen references with different quotes, most of which seemed to think that a 25 gallon fill up would feed a person for a year.




and this letter re the Brazil story.  The writer suggests that 10% of brazil's actual energy comes from ethanol while CNN's report suggested that 50% came from ethanol and some reports were suggesting 100%.

I have been running all our cars on MOHAWK 10% ethanol for four years now.and wonder if that is really the way to go now.

It takes 1.56 litres of ethanol for the power of 1 litre of gas and I notice that my old caddys get 5 km a litre with the ethanol blend and 6 with straight shell gas.  HMMMM?!

It is all something to think about.
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H-3 Visa is expiring

QUESTION: I have a H3 visa and it expires in dec 07 can it be extended or can we get an extention.

david ingram replies:

An H-3 Visa is for a training period for a business and supposedly expires when the training is expected to be over so the answer is yes if the training is not finished and NO if the training is finished.

The visa is not allowed for the creation ofr production of a product unless the production of a/the product is absolutely necessary for the training process to be perfected.

You can NOT renew it for your benefit.  It can only be renewed by your employer for the benefit of the employer.