This is a multi-part message in MIME format. ---------------------- multipart/mixed attachment Name: dxxx My question is: Applicable to both US and Canada QUESTION: Question pertains to Canadian citizens moving to the US. We are home owners in South Surrey with 2 rental duplexes in the interior of BC and have plans to transfer to the US in year on a L1 visa. The intent is also to obtain a green card while on the L1 and become permanent residents. Can we sell our primary residence after moving to the US and still get the tax free exemption? Can the primary house be rented out for a short time (6 months) before selling and still obtain the tax free exemption. Also will there be a problem be a cdn citizen and a permanent US resident and holding cdn rental properties? Thanks, Dxxx --------------------------------------------------------------------------- David Ingram replies: The only capital item that can achieve a new value when crossing the border for tax purposes is your family house. All other items, mutual funds, RRSPs, cabins, rental homes, classic cars, etc will maintain their original value for tax purposes when you cross the border. So, if your residence was worth $300,000 when you crossed the border and you sold it for $310,000 (forget about exchange rates here please) you would owe tax to Canada first on the $10,000 and the US second. After paying the Canadian tax, you would claim a foreign tax credit on form 1116 of your US 1040 return. The rental houses are another problem. If you paid $100,000 and sold them for $200,000 (more likely $40,000 and $50,000 if in the interior) you would use the original purchase price in both countries. Same procedure for the foreign tax credit. As a US resident, you will have to have a Canadian Agent represent you for the purposes of your Canadian Section 216(4) tax return. You have to make a projection of the expected rent and the agent has to remit 25% of the gross rent or 25% of the net rent (if approved) to the CCRA (Canadian Customs and Revenue Agency) every month. Your Canadian returns (assuming you and your wife both own the properties) have to be filed by June 30th of the following year. If you do not file the returns, your Canadian Agent is liable for your income tax. Both you and your agent need to file and sign a Canadian Form NR-6 (attached) david ingram - [email protected] <mailto:[email protected]> David Ingram and Associates Realty Inc 108-100 Park Royal South West Vancouver, BC, CANADA, V7T 1A2 (604) 913-9133 - (604) 913-9123 www.centa.com <http://www.centa.com> Cell is (604) 657-8451 (10 AM to 10 PM seven days a week) US / CANADA / MEXICO Working Visa and Income Tax Specialists Be ALERT, the world needs more "lerts" --- Outgoing mail is certified Virus Free. Checked by AVG anti-virus system (http://www.grisoft.com). Version: 6.0.489 / Virus Database: 288 - Release Date: 6/10/03 ---------------------- multipart/mixed attachment A non-text attachment was scrubbed... Name: NR-6 Non Resident Undertaking.pdf Type: application/pdf Size: 20093 bytes Desc: not available Url : http://lists.centa.com/mailman/private/centapede/attachments/479b50a9/NR-6NonResidentUndertaking.pdf ---------------------- multipart/mixed attachment--
