Hi - the 1-800 number don't work in the US but I would love my
question answered on-air as I am listening on-line.
My husband and I are Canadian citizens, and have moved to the US. We
rented out the Canadian family house for three years and paid tax on
the income, and just sold the house. We lived in it for 2 years prior
to leaving the country. We have paid a full 25% capital gains tax on
the amount the house has appreciated since we left the country. The
US accountant now says we have to pay US capital gains on the amount
the house appreciated since we purchased it (even though we lived in
it for two years). We fixed it up during that time and are looking at
$100,000 appreciation before we moved. Is this accurate? Thanks so
much!
K (from California)
----------------------------------------------------------------------
----------
david ingram replies:
There is a step up in the value of the house when you entered the US.
You should have paid about 23% of the profit in Canada and only pay
tax on the amount of the increased value of the house after you got
there.
And, if you have not bought another house and did live in it for two
out of the last five years I would treat it as a tax free sale for up
to $250,000 each.
The step up in value now applies to almost everything but has always
applied to your old family house under the United State / Canada
Income tax Convention (1980) with amending protocols:
Article XIII(6) reads as follows:
6. Where an individual (other than a citizen of the United States) who
was a resident of Canada became a resident of the United States, in
determining his liability to United States taxation in respect of any
gain from the alienation of a principal residence in Canada owned by
him at the time he ceased to be a resident of Canada, the adjusted
basis of such property shall be no less than its fair market value at
that time.
If you continue to have a problem (maybe one out of a thousand US
accountants will understand this), you are welcome to send the returns
to us. You had25% withheld but unless you did not use a Realtor, you
have a refund coming back which will be at least 25% of the real
estate commission you paid.
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 host a 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
Local calls are taken at (604) 280-0600 and Long Distance calls are
taken at 1( 866) 778-0600
Callers to the show are invited to attend free seminars on financial
planning with such specialities as deductible mortgage interest. They
are held at Fred Snyder's Office at 1764 West 7th in Vancouver - (604)
731-8900 for more information.
=========================================
David Ingram's US/Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Res (604) 980-3578 Cell (604) 657-8451
(604) 980-0321 Fax (604) 980-0325
Email to taxman at centa.com
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
and the author and any and all non-contractual duties are expressly
denied. All readers should obtain formal advice from a competent and
appropriately qualified legal practitioner or tax specialist in
connection with personal or business affairs such as at www.centa.com.
If you forward this message, this disclaimer must be included."
Be ALERT, the world needs more "lerts"
==============================
This from "ask an income tax and immigration expert" from
www.centa.com or www.jurock.com or www.featureweb.com. David Ingram
deals on a daily basis with expatriate tax returns with:
multi jurisdictional cross and trans border expatriate problems for
the United States, Canada, Mexico, Great Britain, the United Kingdom,
Kuwait, Dubai, Saudi Arabia, Thailand, Indonesia, Japan, China, New
Zealand, France, Germany, Spain, Italy, Russia, Georgia, Brazil, Peru,
Ecuador, Bolivia, Scotland, Ireland, Hawaii, Florida, Montana,
Morocco, Israel, Iraq, Iran, India, Pakistan, Afghanistan, Mali,
Bangkok, Greenland, Iceland, Cuba, Bahamas, Bermuda, Barbados, St
Vincent, Grenada,, Virgin Islands, US, UK, GB, and any of the 43
states with state tax returns, etc. Rockwall, Dallas, San Antonio and
Houston Texas
Denmark, Finland, Sweden Norway Bulgaria Croatia Income Tax and
Immigration Tips, Income Tax and ImmigrationWizard Income Tax and
Immigration Guru Income Tax and Immigration Consultant Income Tax and
Immigration Specialist Section 216(4) 216(1) NR6 NR-6 NR 6
Non-Resident Real Estate tax specialist expert preparer consultant
expatriate anti money laundering money seasoning FINTRAC E677 E667
4789 4790 TDF-90 Reporting $10,000 cross border transactions
=========================
--
No virus found in this outgoing message.
Checked by AVG Anti-Virus.
Version: 7.0.300 / Virus Database: 266.1.0 - Release Date: 2/18/05
-------------- next part --------------
An HTML attachment was scrubbed...
URL: http://www.centa.com/CEN-TAPEDE/centapede/attachments/20050221/4ea764da/attachment.htm
What's Related