QUESTION:
I am canadian landed immigrant and currently working in US on H1B vasa. I
and my family are staying here in CT, US throughout the year 2004 except 2
months (60 days). Also, I have house in canada and it is rented out
currently. Please suggest me the best way to file my taxex in both the
countries so that I will get the tax benefits as well as my also I will keep
my canadian immigration status in good shape.
Thanks,
====================================
david ingram replies:
1. You need to file a Canadian Section 216(4) tax return for the rented
house by June 30, 2005 for the 2004 tax year. If the house is in joint
tenancy, you both need to file a return.
2. You need to file a joint US 1040 and a Connecticut CT-1040 as well. The
rent received in Canada will also be reported on your US 1040 and the
Connecticut CT-1040.
If there was any tax payable to Canada, you will claim a credit for it on
your US 1040 by filing form 1116.
I hate to say it but you should likely send us all of your tax returns
because you will go crazy trying to find anyone there to do them. Most
people will want to file you as a Dual Status US resident as married filing
separately and that will cost you a lot of tax.
To maintain your PR status, you must reside completely in Canada for 24
months out of every five year period. If you work or live in the US for 37
months, your PR status in Canada is automatically cancelled UNLESS you are
working for a Canadian company on a transfer or unless your wife is a
Canadian Citizen.
If you live out of Canada for 35 months, come back for 25 months, leave
again for 35 months and come back for 25 months, your PR status would be
valid.
However, that is silly. Get your Canadian Citizenship first. Then play
around with working in the states on a long term basis. Consider living in
Windsor and commuting to work in Detroit for instance. If you are already
close to your five years, get back to Canada and get the citizenship
first..... first... first......
Or live in White Rock and commute to Bellingham.
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