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David,
I had emailed you before about this issue, and you added myself to your
address list. If you have time could you please just give a simple yes or
no answer to my questions.
Moved to & Working (H1B) California - 13 Jan 2003
Capital Gains From the sale of a Cabin - 4 April 2003 $29,639
Other than Capital Gain there was no Income in Canada
Do I claim the capital gain in Canada, and only the capital gain?
Do I claim the capital gain in the US?
If have to claim the capital gain in Canada, do I get a foriegn tax credit
in the US?
Thank you,
Brian
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david ingram replies:
You needed (or need) to file a T1161 departing Canadian Asset statement with your 2003 departing Canada tax return.
This departing return would calculate the tax on the cabin as of Jan 13, 2003. and the tax owing would be to Canada.
It is unlikely that it increased in value much in the three months after that. Because it likely sold sooner and took two months to close.
Therefore you would report it on your departing Canada return and pay tax to Canada and show it as a wash sale in the US (only because the times are so close).
There would be no profit in the US and you would not get any foreign tax credit.
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If, on the other hand, the cabin had gone up in value after you left, you would still file the departing Canada return and then calculate the capital gain again after the sale. In this case there would have been a gain while living in the USA and you would claim a foreign tax credit on the US return for the portion of tax paid to Canada on the increased value after leaving Canada.
Glad to assist you with these returns. We would do the US 1040, the US state return, the departing Canada return and the sale after departure for $700 to $1,200 Canadian.
David Ingram's US/Canada Services
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Calls accepted from 10 AM to 10 PM 7 days a week
Res (604) 980-3578 Cell (604) 657-8451
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[email protected]
www.centa.com www.david-ingram.com
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