QUESTION:
Hi again. Thank you for your help with my questions re: retirement
accounts - I will be leaving both in the US for now. May I ask another
question? With Hurricane Rita quickly approaching, helping to drive the
Canadian dollar stronger than ever, I would like to leave the proceeds from
the sale of my house in California (which I hope to have sold by November)
in my US bank account until I decide what to do with the money. Assuming I
move myself and my belongings into Canada in 2005, but don't work there
until 2006, will the sale of my house need to be reported to the Canadian
side at all? Is it smart/dumb to leave the hopefully $200k from the house
sale in the US? Thank you for assistance.
=========================================
david ingram replies:
If the house is sold before you came back to Canada, it has no place on your
Canadian return.
However, your worldwide financial dealings are reportable on anything that
happens after you arrive here.
So, you will have to report any interest received from the US deposit and if
the house sells a couple of weeks after you arrive, you should report it but
it will be an in and out with no profit to pay tax on. You would use
Canadian form T2091.
Should you leave the cash money behind?
That is a question for money arbitrage.
A simple solution would be to bring half of it and leave half of it. I
personally think we are gong to a 90 cent or a 95 cent dollar and if that
happens, you will wish it had all come.
By leaving your IRA and 401(K) behind you have already sort of split your
holdings between the two countries.
What I do think is that you should not stay out of the housing market, So
if you are going to buy right away or pretty soon, you will have to bring
the money up because you should pay as much down as you can and not keep a
reserve for emergencies.
You have to arrange your affairs very specifically to make the Canadian
mortgage interest deductible.
Go to www.centa.com and read the Nov 2001 Newsletter (top left on home page)
about making your Canadian Mortgage deductible.
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, I, david ingram am a
permanent guest on Fred Snyder of Dundee Wealth Managers' LIVE talk show
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Callers to the show and questioners on this board can also attend the
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Interest deductible.
David Ingram's US/Canada Services
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