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QUESTION:
As a US citizen, if I put out to rent an apartment that I own in =
Montreal do I have any obligation to file an NR6 or to withold taxes =
from the rent? Do I have any obligation to advise my tenant to withold =
taxes? If I do neither, will I incur any penalty when I file my annual =
tax return in Canada reflecting my small gain/loss on the proerty?
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=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
david ingram replies:
It is your responsibility to arrange for an agent although I did a =
return for a fellow from LA this week. He has owned a rental in North =
Vancouver for some 22 years without ever having filed an NR-6. The CRA =
has slipped in not getting on top of it.
If you file your section 216(4) return on time you will be allowed to =
deduct the expenses. If you are more than two years late, Canada will =
tax you on the gross at 25% and not allow you any deductions (In the =
same situation in the US, the penalty is 30% of the gross with no =
deductions).
I am going to reproduce another Montreal question I had a few months =
ago.
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=3D=3D=3D=3D=3D=3D=3D
QUESTION: We understand that there is a 25% tax on=20
gross rent from investment properties=20
owned by non-canadians who have not=20
filed their proper forms. We were=20
ignorant and knew not of what we were=20
doing when we bought our rental=20
property... which runs at a loss. In=20
Montreal the bienvenue tax is over six-
thousand dollars (this is the tax all new=20
home-owners must pay in Montreal). =20
Can we deduct this as a tax item on our=20
federal return this year? Next year we will=20
have to be sure to fill out all the proper=20
paperwork.... Thanks for your response.
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david ingram replies
The 25% tax is a withholding tax, not a tax if you get the proper return =
in within 24 months. You will have to pay the 25% first, but if we file =
a return under Section 216(4) with the proper whining letter, you will =
get it back if you actually lost money in the rental. In fact, the 2003 =
216(4) return is not actually due until June 30, 2004 so we do not even =
need a whining letter if you get it (the financial figures) here in the =
next ten days.
I would be happy to look after this for you because it is a sort of =
specialty. All together, we lkikely prepare over 200 non-resident tax =
returns for Canadians with US property or Americans with Canadian =
Property. Throw in a couple of Germans, a couple of Australians, a =
Spaniard, Italian, Swede and New Zealanders and even an Antartica worker =
and you can see that doing it by mail is simple. An advantage of our =
doing it is that we can also prepare the US andState return with the =
proper tax credits and you do not need to try an train a local =
accountant. (It can take 20 to 30 hours to figure it out the first =
time).
And, if you have a local accountant that you really want to use, we =
prepare a dummy US return with all the proper figures in the right place =
so that your accountant can just plug in the figures without having to =
work at it.
Let me know if I can help.
The Bienvenue Tax is considered a capital addition to the cost of the =
building. We have a PPT (property purchase tax) in BC with the same =
characteristics.
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
www.600AM.com=20
Local phone calls to (604) 280-0600 - Long distance calls to =
1-866-778-0600.=20
Old shows are archived at the site.
This from ask an income tax immigration planning and bankruptcy expert =
consultant guru or preparer from www.centa.com or www.jurock.com or =
www.featureweb.com. Canadian David Ingram deals daily with tax returns =
dealing with expatriate:
multi jurisdictional cross and trans border expatriate gambling refunds =
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Germany, Spain, Italy, Russia, Georgia, Brazil, Peru, Ecuador, Bolivia, =
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Iran, India, Pakistan, Afghanistan, Mali, Bangkok, Greenland, Iceland, =
Cuba, Bahamas, Bermuda, Barbados, St Vincent, Grenada,, Virgin Islands, =
US, UK, GB, American and Canadian and Mexican and any of the 43 states =
with state tax returns, etc.
income tax wizard wizzard guru advisor advisors experts specialist =
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preparer of Alaska, Alabama, Arkansas, Arizona,=20
California Denver Colorado, Connecticut, =20
Delaware District of Columbia Miami Florida,=20
Garland Georgia, Honolulu Hawaii, Idaho, Illinois,
Indiana Des Moines Iowa Kansas Kentucky,=20
Louisiana Bangor Maine Maryland =20
Boston, Massachusetts, Michigan, Minnesota, =20
Mississippi, Missouri, Montana, Nebraska, =20
Nevada, New Hampshire, New Jersey,=20
New Mexico,New York, North Carolina, =20
North Dakota, Ohio, Oklahoma, Oregon.=20
Paris, Rome, Sydney, Australia Hilton
Pennsylvania, Rhode Island, Rockwall,=20
South Carolina, South Dakota, Tennessee, =20
Texas, Utah, Vermont, Virginia,=20
West Virginia, Wisconsin, Wyoming,=20
British Columbia, Alberta, Saskatchewan,=20
Manitoba, Ontario, Quebec City,=20
New Brunswick, Prince Edward Island,=20
Nova Scotia, Newfoundland, Yukon and=20
Northwest and Nunavit Territories, =20
Mount Vernon, Eumenclaw, Coos Bay=20
and Dallas Houston Rockwall Garland=20
Texas Taxman and Tax Guru and wizzard=20
wizard - David Ingram's US/Canada Services
US/Canada/Mexico Tax Immigration & 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
Bus (604) 980-0321=20
[email protected]
www.centa.com www.david-ingram.com
Disclaimer: This question has been answered without detailed =
information or consultation and is to be regarded only as general =
comment. Nothing in this message is or should be construed as advice =
in any particular circumstances. No contract exists between the reader & =
the author and any and all non-contractual duties are expressly denied. =
All readers should obtain formal advice from a competent financial, or =
real estate planner or advisor & appropriately qualified legal =
practitioner, tax or immigration specialist in connection with personal =
or business affairs such as at www.centa.com. If you forward this =
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