I 'm an American married to a Canadian husband.  We were married in the US 16 years ago. We lived and worked in the US for 9 years before moving to Canada 5 years ago. He has worked for the same US firm in the US and now in Canada (He does telephone support for a software firm and works out of our home so he can be with me and our children). How can he return to the US to live and work (same job) with me and our 5 kids?


   
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david ingram replies:

The US company could apply for an H1-B for him but there were 130,000 applications last year and only 85,000 issued so that might not happen.  Even MICROSOFT has given up and is opening a Lower Mainland Branch with 200 employees becasue they have become frustrated with their ability to get foreign workers into the USA.

The smartest method would be for you to apply for a green card for him and make sure that all your children have their US passports.

You would sponsor him for the green card and that would give him many more rights than an H1 visa.

You can find all of the forms at: http://www.uscis.gov/portal/site/uscis/menuitem.eb1d4c2a3e5b9ac89243c6a7543f6d1a/?vgnextoid=db029c7755cb9010VgnVCM10000045f3d6a1RCRD&vgnextchannel=db029c7755cb9010VgnVCM10000045f3d6a1RCRD


Start off with form I-130 Petition for an Alien relative
http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f35e66f614176543f6d1a/?vgnextoid=c67c7f9ded54d010VgnVCM10000048f3d6a1RCRD&vgnextchannel=db029c7755cb9010VgnVCM10000045f3d6a1RCRD

At some point you will need G-325 For his Biographic Information   http://www.uscis.gov/files/form/g-325.pdf

You will need an I-134 - Affidavitt of Support

http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f35e66f614176543f6d1a/?vgnextoid=fe3647a55773d010VgnVCM10000048f3d6a1RCRD&vgnextchannel=db029c7755cb9010VgnVCM10000045f3d6a1RCRD

Another Affidavitt of support - If you do not work, you will need a relative to co-sponsor or use other household income and assets

http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f35e66f614176543f6d1a/?vgnextoid=b70f8875d714d010VgnVCM10000048f3d6a1RCRD&vgnextchannel=db029c7755cb9010VgnVCM10000045f3d6a1RCRD

contract between yourself and household member

http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f35e66f614176543f6d1a/?vgnextoid=0c7e8875d714d010VgnVCM10000048f3d6a1RCRD&vgnextchannel=db029c7755cb9010VgnVCM10000045f3d6a1RCRD

You will want to read this for the poverty guidelines

http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f35e66f614176543f6d1a/?vgnextoid=73c63591ec04d010VgnVCM10000048f3d6a1RCRD&vgnextchannel=db029c7755cb9010VgnVCM10000045f3d6a1RCRD

Hope this helps.

Now if Ihad a $1,000 for eveyone like yourselves where you came back to Canda without the spouse taking out US citizenship and now they have to go through hell to get back, I would be rich.

----------------------------------
Now, if he still happens to have a green card, my answer would be different.

In any case, if you have been working in Canad or have signingauthority over accounts with a total of $10,000 or have an RRSP in your name, you should have been filing US Tax returns and forms 8891 and TDF 90-22.1  each year.  If your husband has had a green card all this time, he should have been filing as well and thgat could be his salvation if he catches up.  If he catches up, his green card is likely still valid.

These older questions are valid.  Note that if you have not filed forms TDF 90-22.1, the new penalty is $10,000 per year as a minimum but penalties are not being issued for people who come forward voluntarily.  You should file back six years to avoid penalty.

------------------------

[email protected]: Please see bottom of message if you wish to unsubscribe.
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Expert:         [email protected]
Date:           Saturday June 09, 2007
Time:           06:04 PM -0400

QUESTION:

I have been living in the U.S. for 8.5 years now and have recently moved to Chicago from California.  We have a significant amount of $$ in Canadian RRSP's of which over half is in a mutual fund that has excessively high fees.  I have wanted to rebalance my RRSP and move money from one mutual fund into one or more different ones, all of course remaining within the RRSP.  I am told that at leat with respect to California who don't recognize the Cdn/US free trade tax treaty, that that would trigger significant California tax on any and all gains including those gained before I ever moved to the U.S.?!?!?  Now that I have moved to Illinois, do I have flexibility to move money within my RRSP or am I still stuck.   My broker in Canada isn't even sure if he is allowed to execute the trade.
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david ingram replies:

I am so busy that you are the only question answered for the last couple of days out of about 300 received in the last couple of days.

While you were in California, the internal earnings of your Canadian RRSP accouts were taxable on your California tax returns.  California is the only state that does not recognize the Federal exemptions when claimed.

To claim the federal exemptions, you need to fill in form 8891. Don;t forget that youalso need to fill in forms TDF 90-22.1 as well to avoid the possibility of an up to $500,000 fine plus five years in jail;.  (see the bottome two questions on schedule B of your 1040)

Your broker can NOT likely move the contents of your RRSP.  You need someone like Darrel Thompson or Dan Walkow as follows from an older reply: -----------------------------------
QUESTION: 1. have been trying to find ethical investment firm to go with in Canada and can not seem to get any unbiased answers We live in Red Lake Ontario (landed immigrants), but are also US citizens

2. Is this Stansberry & Associates legit, as they seem to have many different opportunities claiming great returns
Pinchot Retirement Plan,  Master Limited Partnership, Market Index Target Term Security , Oakmark Select Funds
Thanks greatly looking forward to your email


--------------------------------------------------------------------------- david ingram replies:
I have no good or bad knowledge about Stansbery and Associates. None of my clients deal with them to my knowledge.

From looking at their website, they seem to be a newsletter operation as mucyh as anything.  I have about 15 interviews with newsletter writers on gold (John Embry), oil, uranium (Martin Kafusa), silver (Sean Rahkimov) real estate (Ozzie Jurock), futures and commodities (Victor Adai), Resources in General (Elsworth Dickson, Publisher of Resource World)  etc at www.howestreet.com - mostly in the third column.

Two ethical people who specialize in selling securities, RRSPs, etc., to US citizens in Canada or Canadians in the US  are:

Mr Darrell Thompson
Blackmont Securities
Toronto
Local    (416) 874-8007
LD        (866) 775-7704
www.blackmont.com

AND

Dan Walkow
Seabank Financial
White Rock
Local     (604) 541-9952
L D        (866) 541-9952
www.seabankcapital.com
__
These two individuals and their companies have gone to the effort to get themselves registered just about everywhere so they can deal with a Candian in Florida or California or Nevada, etc.
____________________________________

Note that because of their specialty, they tend to deal with accounts in excess of $200,000

However, both parties would welcome an exploratory call.

QUESTION: My mom recently passed away and owned a condo.  The title is now being transferred to my sister and me in order for us to sell it.  Do we pay capital gains on this sale and what percentage does the government take?  What a shame, a person works all their lives for what and the government takes half.

--------------------------------------------------------------------------- 

david ingram replies:

The tax depends upon how much more you get for the house over what it was worth when your mother passed. If you do not get any more, than there is no tax.  If it goes down in value between date of death and sale, there is no tax.  But that has not happened lately in Saskatoon.  In fact in the last year Saskatoon has recorded the second largest increase in Canada with up to 25% increases.  As Judy Monchuk's July 5th CP article said

"Saskatoon recorded Canada’s largest property jumps in the second quarter: with bungalows costing an average $281,250 - more than $100,000 over the same period in 2006.( 35.55%  increase) Two-storey homes were even more expensive, going from $196,500 to $305,000. Regina bungalows sold for $204,000 over $143,250 a year earlier."  -

SO!

Assuming it was your mother's personal residence at her death, any profit from the day she bought it is tax free.  In fact, it was considered to have been sold the day she died and you might even want to file a form T2091 with her final return.

What is taxable in any increase in value from the date of death.

Saskatoon has had a good increase in the last year and you should get more than it was worth on the date of her death..

So let's pretend it was worth $100,000 on the date of death and you sell it for $130,000 and it costs $8,000 for the costs of sale.

The profit would be $22,000 divided equally bvetween you and your sister.  You would each report this on schedule 3 of your T1 tax return for the year you sell.  When you get to the bottom of schedule 3, it tells you to divide the capital gain in half and report half on line 127 of your tax return.  So you would each owe tax on $5,500 in this scenario.

The rates are different for each province but in general, if your other income was $30,000 or less, you would owe about 25% tax or $1,375.00.  If your other incoem wa over $125,000, you would owe about 45% or $2,475 (on your $11,000 share of the profit) which equals 22.5% of the profit of $11,000.

I don't know where you got the 'government takes half' part but that just isn't or won't be true in this case if it was her principal residence.

QUESTION: I bought a lot in 2005 and constructed a house and moved into it in 2006. I did not have a principle residence prior to this point as I was renting. I had an offer on my house and sold it last year and did make a profit.

At the same time I bought another piece of land that I was going to hang on to before building but since I sold this house I started building and have now moved in. And again this is my principal residence.

In the meantime, I again had someone driving around looking at houses and since I was there I let them look around. Well, they love it! And would really love to buy it.

My question for you is, I don't know much about the capital gains tax law and wasn't sure if I should take the risk on selling it. Would I have to pay capital gains, even though it is my principal residence? The market is so good right now that its hard to stay in one place when someone makes you a deal you can't refuse.

Any advice?

Regards,

Worried & Confused
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david ingram replies:


Building or renovating a house and selling it ss generally considered a venture in the nature of trade whether you live in it while renovating or not.

Selling it because the price was right is a direct example of a venture in trade and taxable at full rates. It would be different and could be tax free if you moved in and could not stand the neighbourhood or they changed public transportation or announced they were not building a school and the house did not fit your circumstances but if yuo just sold it for a good price, you can expect that the CRA might look at it. If you do two in a couple of years, you can be sure that the CRA will look at it. Goto www.centa.com and read the capital gains section in the TAX Guide section in the top left hand box to see what the courts have done in the past and help youo figure out what to do.


The following two older answers will help you. If you sell this second house, you are putting yourself right in the line of fire from the CRA to go back and look at the first one.


In Canada, the purchase and sale of any piece of real estate with or without
renovations is considered a sale and subject to straight income tax unless:

1. It was bought for and clearly used as your personal residence and was
intended to be used for an indefinite period of time which is usually in the
five to ten year range.

2. It was bought as and used as a recreational property

3. It was bought for the purposes of earning long term rental income.

In the case number 1, there is no tax.

In the case of numbers 2 and 3, the sale is treated as a capital
gain and only fifty per cent of the profit is taxed at your regular tax rates.

Lots of / many (anyone caught) are taxed full tax rates when they
buy a house, move in, fix it up and sell it a year or two later and then
do another one.

Of course, most are NOT caught in these circumstances.

However, "any" flip is going to be straight income unless
the person can prove that they bought it to live in and then:

*
married a person with three children and it is not big enough (had to
sell and bought bigger)

* were transferred to another city (had to sell to buy in new city)

* lost their job, were injured, etc. and can no longer afford to move in. In
this case, they would have to show that they had the finances to have paid
for it when they bought it. (Not only can they not afford it but they have
moved into their parents' basement (boomeranged).

* Inherited a house from their parents and do not need it
any more. (are living in the new house)

You can read more by going to
www.centa.com - click on
tax guide in the top
left hand corner and then click on the "capital gain"
section.

david

This older q & A also gives an idea

My
daughter is closing on a presale Yaletown condominium this summer.
She is working until Christmas in Alberta. She returns to Vancouver
from Jan to May and if the job becomes a full time position, then she may
return to Alberta to live. At the time of presale, February 2004, we
thought that the suite would be assigned to her and that she would live in
the suite.

I was hoping that she could declare the suite as her permanent
residence since she is only renting in Alberta and the work is not
permanent. In May 2007, she could decide to keep or sell
the suite.

What does she need to do in order to qualify the suite as her
permanent residence?


-----------------------------------------

david ingram
replies:

There is no absolute answer because you can call a toad a frog
all day long but it is still a toad.

To be a principal residence and tax free for income tax purposes, the
property must have been bought by her to live in and she HAS TO move into
it. - No exceptions that I know of.

You can expect that the CRA will be looking at "every" quick resale
in EVERY downtown building.

In deciding if it is a capital gain or a flip, the CRA will be looking at
the suitability of the unit as a residence, the ability to pay for the unit
and past and even future performance.

In other words if she claimed this one as a principal
residence and then did it again a year later, the CRA would have every right
to go back and reclassify the first one.

QUESTION: Hi,

Both my common-law partner and I bought a house before we lived together in my house. We each pay his/her own house him/herself. However if later my partner sells her own house, will she have to pay tax for the capital gain?
-------------------------------------------------------------------
david ingram replies:

Not necessarily. If her house is not rented and she sells it first and claims it tax free as her prinicpal residence, YOU have to pay tax on yours.

If hers is rented, then it will be taxable but again, she has four years to sell it tax gfree and if she did, YOURS would be taxable.

If the two of you owned the house you live in and also have/had a waterfront Saltspring cabin or a ski chalet at Whistler, you would have the opportunity to sell either tax free and pay tax on the other.

You obviously need to sit down and decide which one will be tax free and how the taxed one will be re-imbursed by the ftax free one.

To be tax free for four years if rented, she has to file an electionunder section 45(2).

The two of you might want to invest in a consultation with me or someone like me.

The following older Q&A might have been from your lady.

------------------------

.
QUESTION: I have owned my home for 4 years and have subsequently moved in with my boyfriend and am now planning to sell my home. I have been renting it out for the past six months and am wondering about the tax implications relating to capital gains, thank you in advance,
_______________________________
david ingram replies:

You have not been living with the boyfriend long enough to be considered a common-law spouse sop at the moment - for a year anyway - you can both have a principal residence tax free.

After that, you are limited to one as a common law couple. Since you are selling yours now within a year, you will get any profit capital gains tax free by filing a section 45(2) election with your 2006 return reporting the rental income on schedule 776.

Attach a note to your 2006 tax return stating something like this

I hereby elect to consider the residence at xxx address, city, prov,etc, to be my principal residence for up to four years even though i did not ordinarily inhabit it after (date).

When you do sell, complete form T2091 to calculate the tax free portion. Form 2091 says you to do not need to file it with your return but keep it in case the CRA wants to see it. My suggestion is that you send it with the return and get it over with.

These older questions will give you a little more:

>> QUESTION:
>>
>> Hi,
>>
>> Last year, we rented out our condo in Vancouver. The
>> plan then was to have the rent cover our mortgage
>> payments for the 12 months that we would be away. A
>> short term solution.
>>
>> Now, we are planning to be away from BC for a longer
>> period of time (approx. 2 years) and wish to sell the condo
>> in the middle of the year, as we are unable to rent the
>> condo for any longer due to strata council by laws.
>>
>> 1) If we sell the condo when there has been a tenant living
>> in it for 12 months, will we pay capital gains?
>>
>> 2) What are our best options to avoid paying this tax?
>>
>> 3) If capital gains would be owed, for how long would we
>> have to make the unit our principal residence again before
>> we can sell it and not pay CGT?
>>
>> Thank you,
_________________________________________________________________

david ingram replies:

If you filed a section 45(2) election with your first year's rental, you
can rent the condo out for up to 4 years (plus 1 in the calculation)
without incurring capital gains tax if you have not bought another
residence that you are lioving in.
See Below:

My question is: Canadian-specific

QUESTION: Dear Mr. Ingram,
I bought a house in the December of year 2000, lived there till the end of December 2000 (3 weeks) and started to rent it out on January 1, 2001. I filed the election 45(2) to claim the house as my primary residence for years 2001, 2002, 2003 and will do it for 2004.
I do not claim a depreciation for those years.
I want to sell the house now. Do I need to move in house first in order to avoid the payment of the capital gain taxes. For how long I have to stay there to be eligible for not paying the capital gain taxes on sold house if I need to move in.

Thank you in advance for you help,
----------------------------------------------------------
david ingram replies:

First I am going to repeat your old question from last July and my answer.

My question is: Canadian-specific

QUESTION: Hi, David!
I would like to know is it possible to use the election under the section 45(2) again if the old house is sold and the new one is bought. Can it be used unlimited number of times by the condition that it is used for each house only once.

Thank you
---------------------------------------------------------------------------
David Ingram replies:

Section 45(2) is intended to allow people to try something out. This means that if you move to a rented condo for a couple of years and rent your house out, you can move back into the house without suffering a capital gains tax under section 45(2).

Since it was passed on June 17, 1972, (32 years ago now) I have never seen it used more than twice by one person.

Does not mean it has not been used more than twice in thirty years, it just means it is unlikely.

There is no numeric restriction but if you are moving in and out of houses, the CRA will treat you as a trader and tax you at full rates.

----------------------------------------------------------
Now, to answer this question. Section 45(2) is NOT something you can plan to use. In other words, your living in the house for three weeks and renting it out and filing a section 45(2) election does NOT make it tax free if you bought the house to rent and not to live in as your personal principal residence.

Your question indicates to me that you are trying to beat the system and did not buy the first house to live in and unless you can show the tax office that you moved every stick of furniture in and really intended to live there, the CRA will not allow it to be sold tax free.

This year, a new policy of the CRA is that they wish form T2091 to be filed with every tax return where a personal house was sold during the year.

If it was your residence and you genuinely intended to live there and were transferred of suddenly got married or could not stand your neighbour or lost your driver's licence or suffered some other disaster that caused you to "HAVE TO" move suddenly, filing section 45(2) will make it tax free provided you did not also own another house that you did live in. If you did own another house that you actually lived in, claiming the house you have filed the 45(2) election for as tax free, will MAKE THE HOUSE YOU ACTUALLY LIVED IN TAXABLE.

If you have a genuine 45(2) election, you do not need to move back in. If it is not a genuine 45(2), moving back in will TRIGGER a tax bill as you move in.

You need a consultation with someone who knows the rules before you make a mistake. I am available in person or by phone at a fee of $350.00 minimum for an hour but not until November now.

As many know, I charge this for US / Canada tax an immigration advice as well. I am not alone though.

If you have a tough US immigration question to ask or one that I cannot deal with (remember I do Immigration AND tax) Joe grasmick is the place to g for a telephone consultation. HIs fee is $295.00 per HALF hour and you can get hold of him at http://s1.amazon.com/exec/varzea/ts/exchange-glance/Y01Y4838730Y0462867/104-8053170-6203936

I have sent two out of town people to him in the last month where it was obvious to me tha tthe people needed a lawyer as opposed to a consultant..

QUESTION: My wife and I purchased a new home 5 years ago. We have been renting out our previous one since. We are thinking about selling the rental property. We will profit $70000 on the sale before paying off the $30000 mortgage. Will we be required to show capital gains or could we invest it in our new home? Would the capital gains be on the $70000 or the gain minus the mortgage on the house?

Thanks,
  ---------------------------------------------------------------------------------
david ingram replies:

The capital gain is calculated as the difference between its value the day you moved out and the amount you sold it for less costs of the sale such as real estate commissions, fixing up expenses, and legal fees.

You do have the opportunity to claim that house tax free by filing form T2091, but you should have made an election under section 45(2) the first year you rented it. The problem with this:

It makes thhe house you are living in taxable for the same time period.  If it went up more than the $70,000, you will owe more than the tax on the first house. This 'can' be beneficial if you do not intend to sell your present home for another ten or twenty years.  The reson is because of the present value of the money.  i.e., it is usually better for your finances to pay $20,000 ten years from now then to pay $10,000 today.  It will ALWAYS be better if you do not need to pay the $20,000 for twenty years.

At the moment, I have never seen the CRA turn down a late section 45(2) election.

The following older question on income tax help will help explain section 45(2) to you. 


QUESTION: Hi David,

Please help.

I bought a Calgary condo in Oct 2003, and lived in the condo until March 2005, when I bought my present house.

The condo was rented from April 2005 to August 2006, and I sold it in Nov 2006, at a gain.

My question: Would I qualify for the Principal Residence exception and be exempted from Capital Gains tax for the condo sale?

Thanks.

Best Regards,

QUESTION: Hi, my boyfriend of 3 years and I are both US citizens. 
He is going to be attending grad school at the University of Waterloo in Ontario, Caanda  
We are not married and do not intend to be married at present. 
We have been unable to live together durring the past three years because he was a 
full time student and did not have time to have a job and study so has been 
living with his parents and I could not afford to support us both. 
This means that we cannot be considered common law partners. 
I need help in obtaining a work permit so that I can come with him. 
I don't really see how I can get one because I have been working at a call center 
for the past two years (only real work exp.) and only have a high school diploma
...soooo, i don't know if i have any chance of obtaining one... 
OR is it possible for me to live in Canada but work in the US? 
Any advice would be great, I'm desperate!
   

---------------------------------------------------------------------------

david ingram replies: 

I am afraid that you are out of luck.  There is no logical visa available to you to come to Canada.  The best I can suggest is your moving to Niagara Falls New York and working there.  At  least you will be close enough for significant visits. you could spend Friday night to Monday morning with your man and Mon to Thursday nights in New York.  Depending upon his schedule, he might spend alternate weekends with you.  Think of it.  Every second weekend in Niagara Falls, The most famous honeymoon destination ever.

Even if you married, you could not work in Canada if you came to Canada with him as the wife of a student..

Visas are usually only issued when a company applies for one in your name because the company  needs your services.

Maybe apply to companies in Waterloo and see if someone is willing to apply for a visa for you.

You can also apply to come on your own  but that is at least an 18 month process at the moment.

 http://www.cic.gc.ca/english/skilled/assess/index.html
This is the self-assessment test for an individual to determine his or her
eligibility to immigrate to Canada without being sponsored by a spouse.
 
----
This is why we need a Fortress North America.  Canada and the USA and likely Mexico should have open borders like the European Union.  63  years ago, The Germans and Italians were at war with the rest of Europe.They wer killing each other by the thousands.  Today, you can drive through 25 countries without encountering a border, there is a common currency for most of it and a citizen of France can work without question in London England or Berlin, Germany without getting any permission whatever.

Canada has never been at war with the US.  The last battle was British troops from what became Canada battling US troops in the war of 1812 - 1814 when British Troops burnt down the White House.  In fact, I laugh every time they play the Star Spangled Banner at a Hockey Game because the author was a prisoner on a British Warship in Chesapeake Bay and the rockets red glare and bombs bursting in air is a description of the Britsh Bombarding Fort Mchenry,  Baltimore and Washington at the same time the Britsh  torched the White House. To be sure, after a night of bombardment, the flag with 15 stars and 15 stripes was flying over Fort McHenry. So the Star spangled Banner is the story of the last battle between the British (US Allies in Iraq) and the US.

Read the story yourself at:     http://en.wikipedia.org/wiki/The_Star-Spangled_Banner

We should take the 30,000 people off the US Canada and US Mexico border and open the continent up to mobility of jobs.

Then we should adopt a Common Currency, The 'Amero' sounds good.

Enough of my political statement.

Good luck.

QUESTION: Hi David.
My question is in regards to income tax exemption for a newly self-employed individual.
I currently work as a contractor doing software developement which I just started about 4 months ago. To set myself up as a contrator, 
I started a small business as a sole proprietor. I can't confirm this, but I had heard that the few first months of a small business, 
the income earned is exempt. Is this true? When I do my taxes for 2007, is the income I earned during the first few months or up 
to a certain amount exempt from income tax?
Having said that, in starting my small business, I used an older registered business along with it's business number and name. I
 only needed to change the address and, since my first business venture was computer related, I only had to change the nature of the business slightly. 
I made no income from the older business. It was a side business which I put to the side and didn't do much with it.
If, from my new business, my initial earnings are exempt, does it still apply to me or since I used an older registered 
business number and name? Is my 'new' small business not considered a 'new' business, but an old one?

----------------------------------------------------
david ingram replies

To give out income tax help, it always helps if I know what country you are in. Most of my questions come from the US but I think yours is from Canada.

There is no 'first few months' tax exemption for a new small business in either country.

Of course, the first $10,000 or so you earn from any business is tax free because of your personal exemption and a dedcution for 1/2 of the CPP you pay out as a self-employed person and all of the CPP and EI you pay as an employee.

CPP payments are essentlially 10% of everything over $4,000.  (this is not an exact figure because I do not know the figures for 2007 yet.) -  So, as a self employed person, if you had a profit of $10,000, there would not be any income tax, but you would owe $600 for CPP (Canada Pension plan).
 
You may be confusing the start up of a small business with GST rules.  You do NOT have to charge GST if you are doing or expect to do less than $30,000 Gross.  But 'IF' you know you are going to be doing over $30,000 gross business, you have to register and charge GST to Canadian Residents.  You do NOT need to charge GST if you are developing software for US clientele but even though you do not need to charge it, you have to register.  That is actually a benefit because when you file your GST 34 return, you will find that you get a refund of all the business GST you have paid in a year.

My wife and I are both dual US/Canadian citizens.  We are contemplating a
relocation back to Ontario from the US after an 11 year absense.  This
relocation may be a full one to Canada or one in which we spend more than
6 months working in the US and the rest of the time working in Canada.

There are RRSP's, a US residence and US business assets involved, and
wherever we end up working, our primary income will come from our business
interests.

Does your firm provide confidential advice for the tax matters related to
such a relocation and how is that advice priced?

In addition we have already made the necessary contributions to qualify
for both Social Security and CPP when we start to retire in 7-8 years. 
Does your firm provide advice in how to maximize the potential income from
the mix of Social Security, CPP and OAS?

Thank you,

--------------------------------------
david ingram replies:

This, of course is what we do.  I rceived two messages from you and
 the other one showed as having been answered but I think it was caught in the system.


The following disclaimer has a copy of our prices.  
If you wish a phone consultation, please call Gillian Bryan 
between 10:30 and 4 PM Vancouver Time at (604) 980-0321.

Good day Sir I have a line of credit on my residential property which I would like to  use for a down payment on a pre-sale purchase for investment purpose. My questions is: can I deduct the interest (from my personal income) occuring from this line of credit or should I deduct the interest when i sell the property. I plan to sell the property before it will be built, with other words... flipping the property in a short time ( less than 3 years or so) Thank you for your reply   ---------------------------------------------------------------------------
david ingram replies:

The interest is NOT deductible on a current basis and is only maybe an addition to the ACB of the condo as you flip it.  Now to be sure, I have not seen the CRA turn the addition of interest down in the last ten years but there is a question mark around it.

When you 'flip' the paper, any profit will be treated as straight income, not a capital gain by the CRA.


The following older questions will help a bit as well


My question is: Canadian-specific

QUESTION: Hi,
If we buy a fixer-upper to renovate and flip without renting it out what are the allowable expenses for deductions?
Thanks

____________________________________________________________________ david ingram replies:   In general anything you spend to do the fixing is a deduction from the final sale profit.  This would include but is not limited to:   materials, subcontractors, legal, accounting, real estate commissions, surveyors, appraisals, interest on the mortgage, interest on a building loan, interest on material loans (maybe because you used a credit card to buy), truck expenses to get supplies and transport tools, afvertising, utilities, photography, landscaping, trash removal, dumping fees, building permits, architects fees, engineering fees, home inspection fees, insurance, helpers, etc.   Remember that any profit is taxable at straight income rates on line 135.  Flipping or renovating does NOT create capital gains tax.  The following older Questions will explain that a bit.   ______________________________________________________________________ DAVID   A "friend" who is a BC realtor and has the flipping  question presented to her
from time to time  recently attended a seminar that was related to this
subject.  As a result she was able to provide me with some interesting
thoughts to ponder concerning "intent" and "professional background" when it comes to "flipping houses"
and tax in Canada.  You may possibly be looked at as a Developer all the
subsequent implications.

Read the full article at <http://tax.centa.com/comment.php?mode=view&cid=8>

----------------------------------------------------------------------------

david ingram replies:

In Canada, the purchase and sale of any piece of real estate with or without
renovations is considered a sale and subject to straight income tax unless:

1. It was bought for and clearly used as your personal residence and was
intended to be used for an indefinite period of time which is usually in the
five to ten year range.

2. It was bought as and used as a recreational property

3. It was bought for the purposes of earning long term rental income.

In the case number 1, there is no tax.

In the case of numbers 2 and 3, the sale is treated as a capital gain and
only fifty per cent of the profit is taxed at your regular tax rates.

Lots of / many (anyone caught) are taxed full tax rates when they buy a
house, move in, fix it up and sell it a year or two later and then do
another one.

Of course, most are NOT caught in these circumstances.

However, "any" flip is going to be straight income unless the person can
prove that they bought it to live in and then:

* married a person with three children and it is not big enough (had to sell
and bought bigger)

* were transferred to another city (had to sell to buy in new city)

* lost their job, were injured, etc. and can no longer afford to move in. In
this case, they would have to show that they had the finances to have paid
for it when they bought it. (Not only can they not afford it but they have
moved into their parents' basement (boomeranged).

* Inherited a house from their parents and do not need it any more. (are
living in the new house)

You can read more by going to www.centa.com - click on tax guide in the top
left hand corner and then click on the "capital gain" section.

david

This older q & A also gives an idea

My daughter is closing on a presale Yaletown condominium this summer.  She
is working until Christmas in Alberta.  She returns to Vancouver from Jan to
May and if the job becomes a full time position, then she may return to
Alberta to live.  At the time of presale, February 2004, we thought that the
suite would be assigned to her and that she would live in the suite.

I was hoping that she could declare the suite as her permanent residence
since she is only renting in Alberta and the work is not permanent.    In
May 2007, she could decide to keep or sell the suite.

What does she need to do in order to qualify the suite as her permanent
residence?

  -----------------------------------------

david ingram replies:

There is no absolute answer because you can call a toad a frog all day long
but it is still a toad.

To be a principal residence and tax free for income tax purposes, the
property must have been bought by her to live in and she HAS TO move into
it. - No exceptions that I know of.

You can expect that the CRA will be looking at "every" quick resale in EVERY
downtown building.

In deciding if it is a capital gain or a flip, the CRA will be looking at
the suitability of the unit as a residence, the ability to pay for the unit
and past and even future performance.

In other words if she claimed this one as a principal residence and then did
it again a year later, the CRA would have every right to go back and
reclassify the first one.

david ingram