My_question_is: Applicable to both US and Canada
Subject: Requirement to file canadian tax returns
Expert: taxman at centa.com
Date: Wednesday December 29, 2004
Time: 08:29 PM -0800
QUESTION:
I am a canadian citizen and the following is my chronological details:
Aug 1997- Aug 2001
Employed in Canada - Filed Canadian tax returns for all years
Sept - 2001 - July 2003
Studied as a full time student in US - had minimal income and filed tax
returns in Canada and US for 2001, 2002
Sept 2003 - to date
Working full time in US. My spouse and I live in the US. We own a home here
and do not intend to go back to Canada in the near future. I filed US
returns for 2003 but have not filed any Canadian returns for 2003. We still
own a condo in Ontario which we have leased out to an independent
third-party leasing company.
QUESTION: Do I have to file canadian returns for 2003? If so, what would be
the best way to minimize my exposure to double taxation.
Thank you for your kind help,
Regards,
===================================
david ingram replies:
You should file a departing Canada return for 2003 for the period Jan to
Sept 2003 or for Jan 1 to the date you rented out the house. When you
rented the house out and departed Canada, you were to file form T1161 (which
lists your Canadian assets including the house) and maybe forms T1243 and
T1244.
I realize it is a big spread but departing Canada returns require a T1161
and possibly a T1243 and T1244.
http://www.ccra-adrc.gc.ca/E/pbg/tf/t1161/t1161-03e.pdf
This is the form to calculate the tax on the T1161
http://www.ccra-adrc.gc.ca/E/pbg/tf/t1243/t1243-03b.pdf
This is the form that defers tax on the deemed disposition
http://www.ccra-adrc.gc.ca/E/pbg/tf/t1244/t1244-03b.pdf
You would have Pro-rated exemptions.
Then you would both file a Canadian Income tax return for 2003 under Section
216(4) which is a special form filed by non-resident Canadians to report
the rental of Canadian Real Estate.
Your 2003 return should also have had a schedule E attached to report the
Canadian rents. And, if you have over $10,000 total in all your Canadian
accounts including RRSP's, Life Insurance and the account for the rental
income, you have to file US forms T DF-90.22 forms. See last two questions
on Schedule B of your 1040/
Note that the US penalty for "not" filing US form T DF-90.22 is Up To
$500,000 PLUS five years in jail. See the form and read it and instructions
at:
http://www.irs.gov/pub/irs-fill/f9022-1.pdf if this fillable form does not
work,
use
http://www.irs.gov/pub/irs-pdf/f9022-1.pdf
Take a look at the forms.
I would be glad to help you with these as it is difficult to find anyone in
many local areas who have the skills and experience to put the Canadian and
US and state returns together at the same time.
We can handle them by fax, courier, email or snail mail.
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 Dundee Wealth
Management and I, David Ingram 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 <http://www.600am.com/>
Local calls are taken at (604) 280-0600 and Long Distance calls are taken at
1( 866) 778-0600
I do not know how far the LD line reaches.
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