Subject: Selling a rental apartment in Downtown Vancouver
Expert: taxman at centa.com
Date: Tuesday May 30, 2006
Time: 03:10 AM -0700
QUESTION:
My wife and I are permanent residents of the USA. We are thinking of
selling our rented condo in Yaletown. What will our tax exposure be from
both the US and Canada? We have owned the condo for 2.5 years.
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david ingram replies:
This is only a theoretical answer.
But if you paid $200,000 Canadian for it in Dec 2003 that would have only
been about $145,000 US
Today, if you sold it for $300,000 Canadian, that would be about $270,000 US
In Canada, split between two of you, the tax would be about $11,000 Canadian
In the US, the federal tax would be 15% of $123,000 or about $19,000 US
The US would give you credit for the $11,000 paid to Canada by your filling
out US form 1116.
The state tax would be an addition if you live in a State with Income tax.
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If you are going to sell, you need to fill out form T2062 within 10 days of
the sale or face a $25.00 a day fine.
It is also taking 3 months for these to be processed by the CRA which means
that 25% of the money is withheld for 3 months or so.
-------------------------------------
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