My_question_is: Applicable to both US and Canada
Subject: tax ramifications if I move to the US?
Expert: taxman at centa.com
Date: Sunday August 20, 2006
Time: 02:26 PM -0700
QUESTION:
David, I am considering moving to the US for work. The fact that my
boyfriend of 4 years lives in Seattle doesn't hurt. I am Canadian born, but
also have US Citizenship. I have always lived in Canada, and up until
recently the plan was for us to settle together here.
I am embarking on a work change, and will be seeking work in Seattle...short
term. About 2 years.
I own a condo in White Rock worth $240K and owe $165K on it. I am able to
rent it out and would prefer to do that right now rather than sell it. I
have lived in it since 2002.
What are the pros and cons of renting vs selling right now? What cross
border tax issues should I be looking into? I am currently unemployed (for
18+ mos) and do not have employment yet in the US. What is the first step?
I am so confused. I want to be able to move back into my condo when I
return but what if life is wonderful south of the 49th? What kind of
penalties can I be hit with?
I thank you for your help with this, and am anxious for your opinions on
anything you might feel is relevant.
-------------------------------------------
david ingram replies:
A. If you move to the US and rent out the condo:
1. You need to get a Canadian resident tax agent to sign a form NR-6 for
you. This form tells the Government you are leaving and will be a
non-resident owner of Canadian rental real estate.
Find the form at http://www.cra-arc.gc.ca/E/pbg/tf/nr6/nr6-00e.pdf
2. You will file a departing Canada tax return showing your date of
departure and pro-rating your exemption amounts by the number of days you
were in Canada.
3. You will also fill in a T1161 to report the existence of your rental
condo. This is an important form with a $2,500 penalty for failure to file
it on time with your departing Canada return. Find it at
http://www.cra-arc.gc.ca/E/pbg/tf/t1161/t1161-05e.pdf
4. If you have other assets listed on the T1161 such as Mutual Funds or a
stock portfolio, you may need to fill out forms 1243 and 1244 as well.
B. You might decide to remain a taxable resident of Canada while you figure
out your life.
If so, you will report your US earnings on your Canadian return and claim a
foreign tax credit for the state and federal taxes, Medicare and FICA paid
to the US. As long as you remain a resident of Canada for the first four
years, you can claim the rental condo as your personal tax free residence
for up to four years in Canada and three years in the US.
This will mean you will pay a little more tax to Canada because you will be
in Seattle and Washington does NOT have a state tax. If you were going to
California or New York or Illinois, the taxes paid to the US would usually
offset any Canadian taxes for a single person with no mortgage interest as a
deduction.
Have fun.
david
=================================.
David Ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
Calls welcomed from 10 AM to 10 PM 7 days a week Vancouver (LA) time -
(please do not fax or phone outside of those hours as this is a home office)
email to taxman at centa.com <mailto:taxman at centa.com>
www.centa.com <http://www.centa.com/> www.david-ingram.com
<http://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 for expert help, assistance, preparation, or
consultation in connection with personal or business affairs such as at
www.centa.com <http://www.centa.com> . If you forward this message, this
disclaimer must be included."
Be ALERT, the world needs more "lerts"
David Ingram gives expert income tax & immigration help to non-resident
Americans & Canadians from New York to California to Saudi Arabia to Mexico
to China or Chile - Cross border, dual citizen - out of country investments
are all handled with competence & authority.
Alaska, Alabama, Arkansas, Arizona,
California, Colorado, Connecticut,
Delaware, District of Columbia, Florida,
Garland, Georgia, Hawaii, Idaho, Illinois,
Indiana, Iowa, Kansas, Kentucky,
Louisiana, Maine, Maryland,
Massachusetts, Michigan, Minnesota,
Mississippi, Missouri, Montana, Nebraska,
Nevada, New Hampshire, New Jersey,
New Mexico, New York, North Carolina,
North Dakota, Ohio, Oklahoma, Oregon.
Pennsylvania, Rhode Island, Rockwall,
South Carolina, South Dakota, Tennessee,
Texas, Utah, Vermont, Virginia,
West Virginia, Wisconsin, Wyoming,
British Columbia, Alberta, Saskatchewan,
Manitoba, Ontario, Quebec City,
New Brunswick, Prince Edward Island,
Nova Scotia, Newfoundland, Yukon and
Northwest and Nunavit Territories,
Mount Vernon, Eumenclaw, Coos Bay
and Dallas Houston Rockwall Garland
Texas Taxman and Tax Guru and wizzard
wizard - consultant - expert - advisor -advisors consultants - gurus - Paris
Prague Moscow Berlin
Lima Rio de Janeiro, Santaigo Zimbabwe
international non-resident cross border income tax help assistance expert
preparation & immigration consultant david ingram, experts on rentals mutual
funds RRSP RESP IRA 401(K) & divorce preparer preparers consultants
New York, Boston, Sacramento, Minneapolis, Salem, Wheeling, Philadelphia,
Pittsburgh, Atlanta, Pensacola, Miami, St Petersburg, Naples, Fort Myers,
Cape Coral, Orlando, Atlanta, Arlington, Washington, Hudson, Green Bay,
Minot, Portland, Seattle, St John, St John's, Fredericton, Quebec, Moncton,
Truro, Atlanta, Charleston, San Francisco, Los Angeles, San Diego,
Sacramento, Taos, Grand Canyon, Reno, Las Vegas, Phoenix, Sun City, Tulsa,
Monteray, Carmel, Morgantown, Bemidji, Sandpointe, Pocatello, Bellingham,
Custer, Grand Forks, Lead, Rapid City, Mitchell, Kansas City, Lawrence,
Houston, Albany, Framingham, Cambridge, London, Paris, Prince George, Prince
Rupert, Whitehorse, Anchorage, Fairbanks, Frankfurt, The Hague, Lisbon,
Madrid, Atlanta, Myrtle Beach, Key West, Cape Coral, Fort Meyers, Berlin,
Hamburg
Warsaw, Auckland, Wellington, Honolulu, Maui, Kuwait, Molokai, Beijing,
Shanghai, Tokyo, Manilla, Kent, Winnipeg, Saskatoon, Regina, Red Deer, Olds,
Medicine Hat, Lethbridge, Moose Jaw, Brandon, Portage La Prairie, Davidson,
Craik, Edmonton, Calgary, Victoria, Vancouver, Burnaby, Surrey, Edinburgh,
Dublin, Belfast, Glasgow, Copenhagen, Oslo, Munich, Sydney, Nanaimo,
Brisbane, Melbourne, Darwin, Perth, Athens, Rome, Berne, Zurich, Kyoto,
Nanking, Rio De Janeiro, Brasilia, Colombo, Buenos Aries, Squamish,
Churchill, Lima, Santiago, Abbotsford, Cologne, Yorkshire, Hope, Penticton,
Kelowna, Vernon, Fort MacLeod, Deer Lodge, Springfield, St Louis, Centralia,
Bradford, Stratford on Avon, Niagara Falls, Atlin, Fort Nelson, Fort St
James, Red Deer, Drumheller, Fortune, Red Bank, Marystown, Cape Spears,
Truro, Charlottetown, Summerside, Niagara Falls, Albany Zimbabwe
David Ingram expert income tax help and preparation of US Canada Mexico
non-resident and cross border returns with rental dividend wages
self-employed and royalty foreign tax credits
This from "ask an income tax and immigration expert" from www.centa.com
<http://www.centa.com/> or www.jurock.com <http://www.jurock.com/> or
www.featureweb.com <http://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, 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 Houston
Denmark, Finland, Sweden Norway Bulgaria Croatia Income Tax and Immigration
Tips, Income Tax Immigration Wizard Antarctica Rwanda Guru Consultant
Specialist Section 216(4) 216(1) NR6 NR-6 NR 6 Non-Resident Real Estate tax
specialist expert preparer expatriate anti money laundering money seasoning
FINTRAC E677 E667 105 106 TDF-90 Reporting $10,000 cross border transactions
Grand Cayman Aruba Zimbabwe South Africa Namibia help USA US
What's Related