I am looking at buying in the United States and want to know what I should watch out for. ---------------------------- david ingram replies: You do not give me much to work with so I will have fun and plug a couple of seminars i have coming up and give you an answer at the same time. 1. Watch out for the price and watch out for the sellers. For instance I have already seen people pay $150,000 when the same thing was available for $50,000. We may not have hit bottom yet and another 20% drop is very possible. 2. Watch out for the price: I have a US foreclosure article coming out in a couple of weeks in Western Investor and do not want to jump that publication but if you look here in a couple of weeks or a month, it will be available on the site, 3. In the meantime, "watch out for the price" and remember that you can NOT work on the property if you buy it. That means that the following listings are dangerous for you to buy in Detroit, (I checked and I think you live just across the border in London, Ontario). Even though they are just 2 or 3 hours away, if you drive fast, you cannot even sweep the sidewalk without danger of arrest and deportation AND being banned from the USA and not even able to go down to look at your investment. The following are interesting and I do not know if that is a down payment to assume the mortgage or not. I do not think so. I think the banks want you to take em over so that they do not have to pay property taxes, etc. I leave it to you to find out. Following that, I am listing some free and some charged for seminars I am giving on the subject in BC. Who knows, you might even decide to grab a cheap flight and fly out to one. Since I charge $472.50 an hour for an individual consultation, a $700 return flight to Vancouver might be a good excuse for a three or 4 day vacation and 6 to 8 hours of seminar. And then following the listings you will find some more information on the rules for working and US taxation see more at http://www.realtor.com/search/listingdetail.aspx?pg=1&cmid=1099893%2c1090151%2c1090152%2c1099894%2c1090153%2c1090154%2c1090155%2c1090156%2c1090157%2c1090158%2c1090159%2c1090160%2c1099895%2c1090161%2c1090162%2c1090163%2c1090164%2c1090165%2c1099896%2c1090166%2c1090167%2c1092243%2c1092244%2c1090168%2c1090169%2c1090170%2c1090171%2c1090172%2c1090173%2c1090174%2c1090176%2c1090177%2c1090178%2c1090179%2c1078986&typ=6&sid=9c7f5c81f2634965b24a5b2c5541769a&lid=1100616117&lsn=10&srcnt=2829#Detail 2,829 properties match your search, 812 with multiple photos There are 19,554 available Real Estate Listings and Homes for Sale Search Results Page 1 of 283 Save this Listing We're sorry, but this listing could not be saved. Please try again later. $1 2 Units 6646 SEMINOLE ST DETROIT, MI 48213 Property Type: Multi-Family Home Please contact agent for sellers addenda prior to writing offer. Please have your buyer pre-qualified with lender known to agent. Free ... View details. 100% Match Save this Listing We're sorry, but this listing could not be saved. Please try again later. $200 2 Units 1568 HURLBUT ST DETROIT, MI 48214 Property Type: Multi-Family Home PROPERTY IS IN AUCTION STATUS. BANK OWNED FORECLOSURE!! Very big home for the money! Multi Family! Needs work!!! ... View details. 100% Match Save this Listing We're sorry, but this listing could not be saved. Please try again later. $499 2 Units 4189 EASTLAWN ST DETROIT, MI 48215 Property Type: Multi-Family Home UPPER/ LOWER MULTI-FAMILY UNIT. LOWER UNIT HAS 2 BEDROOMS, FIREPLACE IN LIVING ROOM W/ 1 FULL BATH. UPPER UNIT HAS 1 BEDROOM, LIVING ROOM ... View details. 100% Match Save this Listing We're sorry, but this listing could not be saved. Please try again later. $500 2 Units 8503 N DEXTER AVE DETROIT, MI 48206 New this week! Property Type: Multi-Family Home BANK OWNED BEING SOLD AS-IS. BUYER MUST SIGN ACR WITH CITY OF DETROIT PRIOR TO CLOSING. CASH SALE. ... View details. 100% Match Save this Listing We're sorry, but this listing could not be saved. Please try again later. $600 2 Units 6416 WHITEWOOD ST DETROIT, MI 48210 Property Type: Multi-Family Home BANK OWNED PROPERTY. BUYER MUST OBTAIN CITY INSPECTION AND SIGN ACR WITH THE CITY OF DETROIT. Please contact agent for seller's addenda ... View details. 100% Match Save this Listing We're sorry, but this listing could not be saved. Please try again later. $700 2 Units 4074 LAWRENCE ST DETROIT, MI 48204 Property Type: Multi-Family Home VACANT LOT FOR SALE! BANK OWNED. SEND ANY AND ALL OFFERS! ... View details. 100% Match Save this Listing We're sorry, but this listing could not be saved. Please try again later. $800 2 Units 9153 CULVER ST DETROIT, MI 48213 Property Type: Multi-Family Home THIS DUPLEX SOLD 'AS IS.' EACH UNIT HAS 2 BEDROOMS, 1 BATH. PROPERTY HAS 2-CAR DETACHED GARAGE. BUYER RESPONSIBLE FOR ANY MUNICIPAL REQUIREMENTS. ... View details. 100% Match Save this Listing We're sorry, but this listing could not be saved. Please try again later. $800 2 Units 7908 SAINT PAUL ST DETROIT, MI 48214 New this week! Property Type: Multi-Family Home THIS UPPER-LOWER DUPLEX SOLD 'AS IS.' EACH UNIT HAS 2 BEDROOMS, 1 BATH, HARDWOOD FLOORS AND FRONT BAY WINDOW. SEPARATE UTILITIES. BUYER ... View details. 100% Match Save this Listing We're sorry, but this listing could not be saved. Please try again later. $900 2 Units 1996 WAVERLY ST DETROIT, MI 48238 Property Type: Multi-Family Home GREAT INVESTMENT. GREAT PRICE! ... View details. 100% Match Save this Listing We're sorry, but this listing could not be saved. Please try again later. $900 2 Units 9322 WOODSIDE ST DETROIT, MI 48204 Property Type: Multi-Family Home AS IS SALE. $1000 MINIMUM EMD. PROOF OF FUNDS/PRE APPROVAL SUBMITTED WITH ALL OFFERS. BUYER TO SIGN CITY REPORT PRIOR TO CLOSE. TAXES, ... View details. 100% Match Pages:1234567...283Next Please Enter a Page Number to go to. Please enter a number between 1 and 283. Go to page: --------------------------------------------------------------------- Every Thursday at 12 noon and 7 PM, Fred Snyder of Dundee Wealth Management presents free Financial Seminars for his clients, potential clients and anyone who phones and asks to attend. THERE is NO CHARGE! (I used to charge up to $999.00 for essentially the same thing) AND - NO ONE'S ARM IS TWISTED TO BUY SOMETHING. They are presented at the Dundee Boardroom (holds about 30 people max) 1764 West 7th Vancouver, BC phone (604) 731-8900 - ask for Freda to register for free. These are genuine educational seminars dealing with everything from how to buy a house to making your mortgage tax deductible to buying an RRSP to alternatives to RRSP accounts to estate planning. So what started as 13 separate seminars has now evolved into 23 separate topics. IT IS NOT UNUSUAL FOR PEOPLE TO COME TO ALL OF THEM. ONE LADY CAME TO 53 separate seminars and her husband came to about 20 with her. If you have a financial consultant, bring them. People have brought their bankers and life insurance agents with them. Take your spouse, your best friend, your son, your daughter, your mother or your worst enemy But do phone 604-731-8900 Fred Snyder also is the host of ITS YOUR MONEY every Sunday morning on CHBD (600 on AM dial) from 9:00 to 10:30. This is a phone in financial show which I appear as a guest on the last Sunday of every month. (Originally I was the co-host but the program is really devoted to BC finances because of BC Securities Legislation and my practice is world wide.) You can listen to 4 weeks back at www.600am.com and listen to the program live around the world every Sunday morning at the same spot. We have taken calls from around the world. In one case, a lady phoned from Florida, got her answer and then asked if I was the David ingram she knew in Regina back in 1959. Small world as they say. Call (604) 280-0600 with your question on Sunday Morning. And as of July 20, 2008, IT'S YOUR MONEY also appears in a different version LIVE on CKNW from 6 PM to 7 PM as a phone in show to answer your questions. Call (604) 280-9898 or 1-877-399-9898 or *9898 on your cell to get your question on the air. Callers to the show are awarded a free written financial plan for the future - be prepared to spend a couple of hours on this. As an aside, I do not do them any more but used to charge up to $3,000 for essentially the same thing in the days before the wonderful computer programs available today to assist. ------------------------------------------------- Anyone thinking of buying real estate right now anywhere should read Garth Turner's Book, "the Greater Fool" - you can find a blog on it at www.greaterfool.ca - This book points out what is happening with real estate around the world and in particular North America. For instance , today's blog shows graphs for Calgary. If you get the book and I recommend you do, read the last two pages (the Afterward) first. You will find that the author is a living in a house. However, he is living in the 'right' house. Garth is a former Conservative Minister of National Revenue, left politics for ten years and is now the sitting Federal Liberal Member of Halton in Ontario. I am a graduate of UBC's Urban Land Economics Course and have bought and sold over 3,000 properties. Been there, done that. I am NOT selling my house. I have lived here for 39 years now and watched it grow from $42,000 to $350,000, down to $156,000 up to $500,000, down to $350,000 again and then climb to $1,200,000. It is only logical that it should drop a couple of hundred thousand again before starting to climb again. Those who have been here (I work out of my house so some 400 clients have been here) know that it has a spectacular view, is on the edge of a forest, and every Sunday morning, I can make it to the radio station in 20 minutes without pushing it. In 15 minutes, I can leave the house, ride my bike around Stanley Park (33 minutes) and be back home within an hour and 15 minutes. It has a fantastic location and fits my needs. I am looking over 100 miles at Hurricane Ridge in Washington state from my Living Room (I can't see it today because of the haze but on a good day) ( you can Google earth its location in Vancouver by looking at http://maps.google.com/maps?client=firefox-a&rls=org.mozilla:en-US:official&hl=en&tab=wl (search 4466 Prospect Road, North Vancouver BC Canada - My house is the one with the Black 87 Cadillac Sixty Special beside it and the big tree in the back yard). and see what i mean. Now that I have said I love my location, you should also read Ozzie Jurock's book - Forget About Location, Location, Location. You can get it at http://www.forgetlocation.com/ -- see more about Ozzie and his real estate seminars at www.jurock.com. Incidentally, I will be speaking at Ozzie's US Land Rush seminar on Investing in Vancouver at the Marriott Pinnacle Hotel on Sept 6, 2008 and you can register for it at http://www2.jurock.com/insider/seminars/landrushusa.asp The price is $97.00 for strangers to the Jurock team and this day is devoted to Canadians investing in US Real Estate. Ozzie has another Canadian Land Rush taking place on October 4. Then i will be speaking at a seminar on moving to and investing in Mexico on Oct 17th in Vancouver and I think Oct 18th in Calgary but do not know the locations yet. And Garth Turner and I will be speaking on Sept 20 at the Convention Centre in Victoria and on Sept 21st at the Convention Centre in Nanaimo along with another four major speakers on money. You can register free for these at www.centa.com - click on MONEY EXPO to register and while there, if you scroll down, you will find a 15 minute interview that I did with Garth Turner. If you miss the free pre-registration, you can still pay 415.00 at the door and Fred Snyder, Host of ITS YOUR MONEY on CHBD every Sunday Morning (600AM) from 9 to 10:30 AM and CKNW (980AM) from 6 PM to 7 PM every Sunday and Ralph Hahmann from his Victoria office. Now to the details on working on your property in the USA --------------------------------- QUESTION: Hello. I know you have answered this before to other lost people but I shall ask again for myself. If we rent out our house in the US (which we are still desperately trying to sell), where do we owe taxes first, the IRS or CRA? On which forms do we report this income? Are we obligated to provide a tax receipt to the renters? Are security deposits/damage deposits income to be reported? Thanks for this and any other advice you can give. ------------------------------------------------------------------------- david ingram replies This question was rejected but I was resting while filing and decided to answer it. What a nice house - love the floors and the view and I see it has been empty coming up three years now. see better at http://maps.Google.com/maps?client=firefox-a&rls=org.mozilla:en-GB:official&hl=en&tab=wl You should Read Garth Turner's book "THE GREATER FOOL" and his website at www.greaterfool.ca where he shows a nice little Detroit house for sale for $625.00 If the following picture does not show up on your email, you can find it on the front page at www.greaterfool.ca ----------------------------------------------------------------------------------------------------------------------------------- For sale in Detroit: 3 bedrooms, 1 full bath, 1129 square feet, lot 40 by 140, ready for immediate occupancy. Price recently reduced, to $625. (Yes, six hundred and twenty-five US dollars) --------------------------------------------------------------------------------------------------------------------------------------------------- Another one of my clients is in the process of walking away form a Detroit house in which he had $100,000 of equity in 2002, long before the sub-prime crisis. He rented it for 4 years but it has been empty for the past two. News reports in Calgary and Vancouver in the last week all point to the total slowdown in real estate sales although we have not had that big price drop yet. On the other hand, I fully expect my house to go down $300,000 in the next two years. check out: http://www.greaterfool.ca/ This book contains a very good analysis of the sub-prime mess and explains that the same thing is actually happening in Canada. Garth and I will be speaking on real estate and cross border investing in Victoria on September 20, 2008 and Nanaimo on September 21. Go to www.howestreet.com to register - click on MONEY EXPO. It is presented by Tom Allen and it is free. If you read the book, be sure to read the last two pages AFTERWORD FIRST. You will see that Garth still has a house (I am NOT selling mine) but it is the perfect house. He sold the one like yours. His recommendation and likely mine is to bail out of the house at any price and solidify your assets. Your house is in the country in an area with little financial hope on the horizon. the cars made there are NOT the cars that people are buying. the price of gas is not friendly to your location at $6.00 a gallon gas which is where we are going in the US and have already hit in Canada. And if you read the Detroit Free Press, today, June 30, 2008 at http://www.freep.com/apps/pbcs.dll/article?AID=/20080630/BUSINESS01/806300358 You will not see anything that will encourage anyone to want to buy in the Detroit area at any price. On the other hand, I have had over 1,000 Canadians at seminars on buying cheap US real estate in the last year. Canadians are snapping up bargains everywhere and maybe yours is one of the bargains that should be kept and rented sooner rather than later. ------------ back to your question I am assuming that you have returned to Canada and the house is sitting empty. If you rent it, you will be taxed first in the US. You will file forms 1040NR plus schedules E and 4562 each. for Michigan you will file form M-1040 and Michigan schedule NR with it and send a copy of the federal return. You will then convert the US to Canadian dollars and the rent will go on your T1-General returns on Schedule T776. If you have any tax paid in Michigan and the US Federal Return, you will claim that tax as a foreign tax credit on CANADIAN forms T2209 and T2036. If you have abandoned the house and are no longer working in the US with a visa, you may not do any work on the house. Even though you may be 70 miles away in Windsor, Ontario, you may not go back and clean the house and paint a wall and cut the grass if it is now for sale. That is taking a job away from an American. You may show the house, but you can NOT accept rent or do any work on the house whatsoever. You MUST use an agent as the following shows. Is it worth it, you might say. You have already watched the price go down in the last three years and you have already lost some $40 to 50,000 in rent that you would have received if rented already. Assuming that there is a mortgage on the property, the mortgage has not been deductible to you anywhere. Renting it out will make the mortgage interest deductible in both countries and return anywhere from $1,000 to $2,000 a month in operating cash. It should have been rented three years ago. ------------------ these older questions might help. My question is: Applicable to both US and Canada QUESTION: My husband and I are planning to purchase a residential property in Las Vegas in Spring 2008. We're both Canadian citizens currently residing in BC. Should we decide to rent this LV house, do we need to file an annual gross rental income in the US AND Canada? And if down the road we decide to sell this income property, how will this affect the capital gains in both countries? Would you also recommend us to incorporate in the US when we buy this investment/income property? If you do, would it be alright to incorporate as a subsidiary of our Canadian holding company? Thank you.--------------------------------------------------------------------------- david ingram replies: In my opinion you should not incorporate unless you want more tax at the end and a 'LOT' more accounting and legal costs in the interim. This older Q & A may help My_question_is: Applicable to both US and Canada Subject: Buying investment properties in USA Expert: taxman at centa.com Date: Wednesday December 26, 2007 Time: 01:48 AM -0000 QUESTION: What is the best way to either structure a company (Canadian or USA)or set myself up personally to shelter / minimize taxes paid as a Canadian resident, working in BC, investing in real estate in San Diego,California, USA? ----------------------------------- david ingram replies: There is no one best way because everyone is different in terms of estate, family, immigration and other issues. In general I do NOT recommend buying in the name of a company. If the desire is to escape public liability, you do that with a good insurance policy. Directors can be held liable for many, if not 'most' responsibilities of a limited company if the creditor or wronged person wants to pursue it. Think of the driver of a car belonging to a limited company. They sue the company AND the driver. If you incorporate cross border, be prepared for an extra $2,000 a year in accounting plus legal fees plus extra state filing fees. California has a minimum $800 a year government filing fee for an LLC as an example. The following older Q & A may help. QUESTION: We just purchased property in Spokane Washington( a 4 plex apartments) We plan on renting out 3 of the units and keeping one. I was told by the border crossing inspector, that I have to hire a rental agency in order to rent out the apartments. and I also have to have a property manger full time.. We will be at our apartment approx 2 times a month.. So we do not need a property manager. Do you know if this true,, or please direct me to the correct person that would be able to help me. Thanks for your time. ---------------------------------------------------------- david ingram replies: You need a property manager if you do not want the strong possibility of going to jail for a few days before being deported and then not allowed back in the USA. For a story about US Immigrations hell for a Holiday Inn Manager, try http://apostille.us/news/local_holiday_inn_express_manager_in_jail_on_immigration_charges;_husband_fights_for_her_return.shtml or how about a married woman's ordeal in Georgia for a traffic violation at http://www.canada.com/ottawacitizen/news/story.html?id=f4f1d2fb-07ae-4560-8f6c-703acf8146fb&k=0 Crossing the border when you have an ad running to show the premises and saying you are going down to spend the weekend in your holiday home (i.e lying to the HOMELAND Security official) could result in seizure of your vehicle and a ban for up to 10 years under their ER (Expedited Removal) process. In other words, it is more serious to lie to the guard at the border than it is to do the work. You 'could' actually show the property for rent, but you can NOT write out a contract for rent or collect a single rent cheque (check) or cash for rent in the United States. There is nothing new about this. The first time I ran into it was in 1972 or 1973. If you are physically there, you can NOT cut the grass, shovel the sidewalk, paint or decorate or repair or fix or remodel or improve or take out the garbage for any part of the rental property. You can paint and clean your own unit if it is NEVER rented or intended to be rented. You can not paint and clean up getting the property ready for rent so DO NOT make the mistake of thinking you can live in one, clean it up and remodel it and then rent it out and do the same for another one and then another one and another one. If you do this and one of your tenants (who maybe doesn't like you because you evicted them or told them to turn their stereo down when you happen to be in town or for any other reason) read my website, (or the USCIS website) he or she would find out that you can NOT do this stuff and could phone the Homeland Security office or write an anonymous letter and you could be arrested in November 2008 for something you did in December 2007. This may seem unreal, but in US terms, working without a visa is just as serious in law as the spontaneous robbing of a convenience store and the penalties can be worse. Think of those nightly news shows with 28 illegal Mexican or Guatemalans citizens being stuffed into Paddy wagons on the Arizona border. This is not a racist comment but with the Mexican illegal immigrants, being rounded up and shipped back across the border is a way of life with no social stigma. For a nice clean living Canadian, being thrown into an immigration detention cell for taking money for rent is a devastating experience. In one case, a mother and her son were thrown into jail for 5 days in Phoenix when she went to Phoenix from White Rock BC. Her husband owned 18 units and HAD a property manager. Unfortunately, he also died in the arms of that female property manager and his widow then fired the property manager and she and her 20 year old son went to Phoenix to collect the rent and hire another property manager. The property manager (who knew the law as everyone in Arizona does) phoned Homeland Security who showed up and arrested mother and son and threw them into the notorious Phoenix Immigration hell with some 300 other illegals. To rub salt into the widow's wounds, the property manager ended up with the property because she was a second mortgage holder on the property and the property fell into default because of the widow's cash flow troubles, largely because she could not go to Phoenix to hire another property manager. For instance, for 'you', this kind of arrest could result in imprisonment for a usual five days in a US immigration jail until you posted $5,000 bail each and then being banished from the US for five to ten years. It does not stop there. This type of conviction would stop you getting on an airplane which stopped in the USA on the way to Mexico. AND, under new US laws that have been proposed but not yet actually put in place, the arrest and banning would stop your Nov 6 trip to Cancun because people in this position will not even be allowed on commercial airliners that are flying over any part of the US. To get to Cancun, you would have to fly from Calgary or Vancouver to London England and then back to Mexico City and 'then' to Cancun and reverse it to get home. This may be overkill but 'You' are / were lucky that the inspector gave you the correct advice BEFORE you put your foot in it. By the way, for income tax You ALSO HAVE TO FILE A 1040NR US TAX RETURN WITH A SCHEDULE E AND A SCHEDULE 4562 EACH. Then the same income gets put on Schedule T776 of your Canadian return. If you have paid tax to the US, you will claim it as a credit on Canadian forms T2209 and T2036. These older questions will help you AS WELL. QUESTION: Hello David, I'm living in Vancouver, finally paid off the student debt but don't see myself getting into the expensive Vancouver market. I do however like to ski and was thinking of buying an inexpensive trailer (25k Cdn) in Maple Falls Washington. However I'm not sure what other expenses I should expect given that it's in the US. I'm not trying to make this an investment with a high return, but I would like to do some handy work to it to increase the value. If I add about 10k worth of value, how would that affect my taxes in the long term? Thanks for the advice. ---------------------------------------------- david ingram replies: One of my favourite weekends ever was in 1973 at the Chandelier (think it has a different name now) when marooned at SnowLine because of the gas shortage when one could only buy gas on odd days if your licence plate ended with an odd number and even days when it was an even number. Strangely, it was that weekend 34 years ago that lets me answer you question now. The cabin I was staying in was not a rental but was built by the fellow who owned it. When he was building it, buddies would come down and help him and one weekend, the INS raided the spot and deported a bunch of his friends for working in the US . He was fine building it because he owned it but no one else can hammer a nail, paint a board, install a sink, or carry a shingle if they are not either an owner or a legal US citizen or US resident with a green card. If your buddy is working and living in the US with a TN, H1, O1, P1, L1 or any other visa but a green card, he or she can NOT help you either. And, if you are intending to rent the trailer out 'EVER', 'you' can NOT hammer a nail, sweep the front steps or clean the toilet. Assuming you are buying this trailer on its own lot, when you go to sell, you will owe the US income tax on the profit. If it is your only piece of real estate at that time, you will not owe Canada any tax because you can claim it as your personal residence if you have not bought another place. ------------------- However, I would far prefer that you stretched your resources to buy something in Canada to live in and combine your present rent and the payments you would have to make for the trailer to buy your home in Canada. If you can't afford a one bedroom, buy a studio. Go down to Ikea on the Lougheed highway and look at how much they can put into a small space. Interestingly, I read the other day that Ikea has now sold enough furniture in North America that 10% of all children are conceived in an Ikea Bed. Now that is information worth knowing. Good luck . QUESTION: If a Canadian citizen purchases real property in the U.S. are they required to have a U.S. Social Security Number? Am I correct that my tax liability will be to the U.S., whilst reporting my income to the CRA but with offsetting foreign tax credits due to paying U.S. income tax? For liability purposes, would it be more beneficial tax-wise to hold the U.S. properties under a Canadian or U.S. corporation? Thank you. ------------------------------------------------- david ingram replies: Assuming that you are going to rent the property out, you will need an ITIN (Individual Taxpayer Identification Number). Fill in a W-7 and submit it with your first tax return or try and get it at the bank where you get your mortgage. I do not suggest a corporation in either country unless you want to spend a couple of thousand dollars a year extra on accounting. As a foreigner with a US corporation, you will need to fill in form 5472 with your 1120 corporation tax return. Then, because the mind and control of the corporation is in the hands of a Canadian resident, you will need to file again in Canada. This older Q & A may help My wife and I are Canadian citizens and own a rental property (house) in Arizona. Do I need to file income tax in the USA? Can we deduct the mortgage interest and any expenses associated with the rental on our Canadian income tax return? Thanks and regards, ______________________________________________ david ingram replies If you do not file a US 1040NR with Schedule E and Arizona 140PY or 140NR return, you face the likely Federal penalties of a $1,000 to $10,000 fine each per year for failure to report rental income as a non-resident plus 30% of the gross rent with no expenses allowed. That is for each of you if you both own the property. And, I have never seen a $10,000 penalty. Then, you will EACH be assessed 30% of the gross rent with no expenses allowed. (Canada's penalty of just 25% of the gross rent with no expenses in reverse seems mild in comparison.) FILE the US returns for every year you have missed. THEN - There is NO responsibility for you to claim any rental expenses on your Canadian return. You can claim them if you wish on form T776. HOWEVER, you MUST report the gross rent on line 126 of your T1 if you do not claim expenses and the net rent if you do,.If there is alegitimate rental loss which has not been created by your using the unit personally, you can use the loss to reduce your other taxable income. A Warning. There is ample evidence that the IRS and CRA are pro-actively sharing information about these. And, if you are in a complex and using the unit personally NEVER talk about the fact you have not filed a US tax return and don't ask a local. I personally know of two people who make their living turning in Canadians who are not filing their US returns. There is a 10% to 30% reward for turning you in by filing US form 211. See it at www.irs.gov - click on forms, etc. If you need help with this, you now know where we are. ---- --QUESTION: We have a rental property in the US. Can I claim the property taxes paid on my condominium as a rental expense deduction on my Canadian taxes? Form T776 mentions only Canadian property taxes however, the general guide states that all expenses can be deducted. -------------------------------- david ingram replies: Anything that can be claimed on schedule E of the US return can be claimed on form T776 You need to do your Schedule E 1040NR first and then convert the US figures to the T776 on your Canadian return. If the condo is in Arizona, you would do a 140NR or if in California, a 540NR. There is no state tax in Florida, Texas or Nevada, the other three popular places for a Canadian to have a rental US condo. The difference between the two counties is the method of claiming depreciation. In the US, you MUST calculate the depreciation and include it even if it creates a loss. The good news is that the operating loss caries forward as a future deduction against rent OR Capital Gains as opposed to non-resident losses in Canada which unfairly disappear into the ether. In Canada, you do NOT have to claim it and if you do, can only claim enough to create a zero rental. Depreciation or CCA (capital cost allowance) as we call it can NOT be used to create or increase a loss. Make sure that you do the US returns, particularly if you are losing money. The penalty can be a minimum of $1,000 to $10,000 PLUS 30% of the gross rent for failure to file a US rental return by a non-resident. We, of course, are ideally suited to look after these for you by fax, snail mail, email or courier. --------- _____________________________________________ QUESTION: Hi, My wife and I are looking at possibly purchasing a condo in Palm Springs for our retirement. We are both 50 years old and plan on working for the next 7 or 8 years. Our plan is to purchase and use it a few times a year and rent/lease it out for the remainder of the year until we reach retirement at which time we would spend 4 or 5 months a years there. Looking for some advice on what we should be looking out for and what would be a better choice mortgage wise, U.S. or Canadian funding. Or is it a good idea at all to purchase U.S. real estate as a Canadian? Any advice or literature that's out there that you could direct us to would be greatly appreciated. Thanks! xxxxx xxxxxxxx ------------------------------------------------------------------------ david ingram replies: If your intention is to start spending significant time there, buying now is extremely sensible because you are buying it at today's price which will logically go up in the future. You 'are' of course, also dealing with exchange. Since your earnings are in Canadian dollars, borrowing the money in Canada and paying cash in palm Springs means that you will be paying in a known currency. To explain that statement, persons who bought in 1991 with a US mortgage payment of $1,000 needed $1,145.87 Canadian dollars to make the payment. By 2001, they needed $1,548.62 to stay even. However, in reverse, if you bought in 2002, you needed 1,570.36 and only need about $1,060 to stay even today. Currency exchange does go both ways. You might want to borrow half in Canada and take out a mortgage for half in Palm Springs. If you are renting the property, you will both need to file a US Federal 1040NR with Schedule E and California 540NR return and then change the currency to Canadian and file form T776 with your Canadian T1 returns. Failure to file the form 1040NR can have penalties of $1,000 to $10,000 per year per return per person even if you lose money. A very real problem is that all sorts of Canadians approach a US accountant and ask about filing and are told they do not need to file a return because they are losing money. Not so. When it comes time to file, hunt down a specialist in dual country tax returns like Gary Gauvin in Dallas,, Steve Peters in Halifax, Kevyn Nightingale in Toronto, Brad Howland in Victoria or myself in Good Olde North Vancouver. Whatever you do, do NOT buy it in a corporate name. You will not save anything and end up with another $2 or $3,000 of accounting fees. You will also need to file personal US tax returns if you are there more than an average of 120 days a year. See the April 1994 newsletter in the top left hand box at www.centa.com SUGGESTED PRICE GUIDELINES - May 17, 2008 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 9 PM 7 days a week Vancouver (LA) time - (please do not fax or phone outside of those hours as this is a home office) expert US Canada Canadian American Mexican Income Tax service help. email to taxman at centa.com www.centa.com www.david-ingram.com pert US Canada Canadian American Mexican Income Tax service and help. David Ingram gives expert income tax service & immigration help to non-resident Americans & Canadians from New York to California to Mexico family, estate, income trust trusts Cross border, dual citizen - out of country investments are all handled with competence & authority. Phone consultations are $450 for 15 minutes to 50 minutes (professional hour). Please note that GST is added if product remains in Canada or is to be returned to Canada or a phone consultation is in Canada. ($472.50 with GST for in person or if you are on the telephone in Canada) expert US Canada Canadian American Mexican Income Tax service and help. This is not intended to be definitive but in general I am quoting $900 to $3,000 for a dual country tax return. $900 would be one T4 slip one W2 slip one or two interest slips and you lived in one country only (but were filing both countries) - no self employment or rentals or capital gains - you did not move into or out of the country in this year. $1,200 would be the same with one rental $1,300 would be the same with one business no rental $1,300 would be the minimum with a move in or out of the country. These are complicated because of the back and forth foreign tax credits. - The IRS says a foreign tax credit takes 1 hour and 53 minutes. $1,600 would be the minimum with a rental or two in the country you do not live in or a rental and a business and foreign tax credits no move in or out $1,700 would be for two people with income from two countries $3,000 would be all of the above and you moved in and out of the country. This is just a guideline for US / Canadian returns We will still prepare Canadian only (lives in Canada, no US connection period) with two or three slips and no capital gains, etc. for $200.00 up. However, if you have a stack of 1099, or T3 or T4A or T5 or K1 reporting forms, expect to pay an average of $10.00 each with up to $50.00 for a K1 or T5013 or T5008 or T101 --- Income trusts with amounts in box 42 are an even larger problem and will be more expensive. - i.e. 20 information slips will be at least $350.00 With a Rental for $400, two or three rentals for $550 to $700 (i.e. $150 per rental) First year Rental - plus $250. A Business for $400 - Rental and business likely $550 to $700 And an American only (lives in the US with no Canadian income or filing period) with about the same things in the same range with a little bit more if there is a state return. Moving in or out of the country or part year earnings in the US will ALWAYS be $900 and up. TDF 90-22.1 forms are $50 for the first and $25.00 each after that when part of a tax return. 8891 forms are generally $50.00 to $100.00 each. 18 RRSPs would be $900.00 - (maybe amalgamate a couple) Capital gains *sales) are likely $50.00 for the first and $20.00 each after that. Catch - up returns for the US where we use the Canadian return as a guide for seven years at a time will be from $150 to $600.00 per year depending upon numbers of bank accounts, RRSP's, existence of rental houses, self employment, etc. Note that these returns tend to be informational rather than taxable. In fact, if there are children involved, we usually get refunds of $1,000 per child per year for 3 years. We have done several catch-ups where the client has received as much as $6,000 back for an $1,800 bill and one recently with 6 children is resulting in over $12,000 refund. Email and Faxed information is convenient for the sender but very time consuming and hard to keep track of when they come in multiple files. As of May 1, 2008, we will charge or be charging a surcharge for information that comes in more than two files. It can take us a valuable hour or more to try and put together the file when someone sends 10 emails or 15 attachments, etc. We had one return with over 50 faxes and emails for instance. This is a guideline not etched in stone. If you do your own TDF-90 forms, it is to your advantage. However, if we put them in the first year, the computer carries them forward beautifully. -------------- next part -------------- An HTML attachment was scrubbed... URL: http://www.centa.com/CEN-TAPEDE/centapede-us/attachments/20080815/852aa773/attachment-0001.html -------------- next part -------------- A non-text attachment was scrubbed... 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