My mother passed away on Novenber 25th, 2007. I was on the property title as joint tenant with right of survivorship solely for the purpose of avoiding probate. I live in Nebraska and was up there to take care of things from November 24th till December 18th. While there I had the property transferred solely into my name. I put the property on the market and have accepted an offer with possesion date of February 21st, 2008. My question is, once this transaction is complete, how do I transfer the funds to the US? Also, are there any tax implications either in Canada or the US? Thirdly, I have been trying to find an insurance broker or company that will insure the property/house for vandalism/water damage until the new owners take possesion. The house is vacant. So far, I have run into a brick wall. Do you know any broker or company that will provide this type of insurance coverage? ----------------------------------------------------------------------------------
david ingram replies:
You have created some problems for yourself which are surmountable but time consuming.
1. Because you are a non-resident of Canada, the law is quite clear that the purchaser must withhold 25% of the purchase/sale price and remit it to the CRA.
2. This can be reduced by filing Forms T2062 and T2062A which allows 25% of the actual profit on the sale to be deducted instead of 25% of the gross price.
You will have to prove to the CRA that 'your' half of the house was NOT yours but that you were only holding it for probate purposes. That is/was best done with a
separate agreement between your mother and yourself when it was put in your name as a joint tenant. That agreement should have said.
a. the house was in joint tenancy for probate purposes and that
b. you would not attempt to sell your half by partitioning the property and that
c. you would not pledge the property as security and/or list it as an asset in any financial papers.
AND, AND, if you were married at the time, your spouse should also have acknowledged those facts in writing and agree that if there was a divorce, she would not attempt to
take half of your half of mother's house.
Without that kind of documentation, the chances are that the CRA will want 25% of any increas in value from when it was put in your name. Thiis may be more than any probate fees saved.
Transferring the money is easy. Just get the official bank transit and account numbers from your US bank and any Canadian bank can transfer money the same day to your accouont in the US.
With regard to insurance, I was a speaker to 113 Canadian resident members of Ozzie Jurock's REAG tonight on the subject of investing in the US and what they could or could not do.
See www.jurock.com for more info.
One of the other speakers was Jeff Fawcett of Fawcett Insurance Agencies in North Vancouver.. He knows his stuff when it comes to Canadian rentals and if anyone can look after you, he can.
Remember though, if it is vacant, someone will have to do a regular inspection. If it is listed, the listing agent can be the inspector.
You should be able to get hold of him at: 604-929-3494.
You will also have to report the property's sale to both the US and Canadian governments and file a tax return to Canada for 2008 in April 2009 for the 2008 tax year..
It is unlikely that you will have any tax to pay if you get the CRA to accept that it was not your property until mom passed. Since you have sold it so close to her death, there is not going to
be any liklihood of any serious capital gains between the date of death on Nov 27, 2007 and your presumed sale within a month or at the most 6 weeks. Although my North Vancouver
house went up by municipal assessmetn by over
$120,000 in the 12 months from July 1, 2006 to July 1 2007. That is $10,000 a month. Fortunately for you, the generally accepted fact right now is that there has been no
gain in the six weeks since mom's death. Therefore, no tax.
If you are the sole heir, you will also have to deal with mom's final T1 return for 2007 and possibly a T3 Estate return to deal with any interest or other monies recieved after her death.
We can obviously do these and the T2062 and T2062A forms and your own CANADIAN 2008 RETURN for you if necessary.
----------------------
these older questions will help with the money question
David:
Thanks
for the minutes you just spent with me on the phone about taking money to
Seattle to pay for a car I have already ordered and put a deposit
on.
Please
send me the links for the forms for both the Canadian side and the
What
happens to this information after I provide the forms? Just record-keeping
for both countries to determine how much money is going in each
direction?
Thanks,
david ingram replies:
Taking money across the border to buy a car is an interesting experience. The last time I did it, I handed the form in to the US person at the border and he looked at it and said "it's wrong", go inside.
So in I went and it was wrong.
I was going down to buy a used cadillac and had $15,000 US with me and had declared it.
Unfortunately, I also had some Canadian money with me and had neglected to include it. The border guard looked at the $15,000 US and instinctively knew i had some Canasdian cash as well and the inside fellow gave me royal hell for not declaring "everything"
The US forms eventually go to Detroit and the Canadian forms go to FINTRAC in Ottawa. However, YOU hand them in at the border.
FINTRAC
24th floor, 234 Laurier Avenue West
Ottawa, ON
K1P 1H7
CANADA
Email
[email protected]
Telephone
1-866-346-8722 (toll
free)
Facsimile
(613) 943-7931
This older Q & A will give you the forms needed:
----------------------------------------------------------------------
I just saw a question you answered about a Canadian living in the
US as a permanent resident selling a home and wanting to transfer the money to a
US bank. (
http://www.david-ingram.com/CEN-TAPEDE/archive/Week-of-Mon-20061009/002904.html) I'm
in the same situation, except I want to keep most of the money in Canada. You
said, below, that the banks will notify the treasury on amounts over $10,000. Is
this $10,000 at any one time, or per calendar year?
What I want to do is bring enough money to pay off my US credit
cards. Through several bank withdrawals and cheque deposits I've already put
about $9600 Canadian into my US bank (not at the same time) to pay bills. Do I
need to wait until next year to bring more in, or is it okay to continue
doing this? I would need maybe another $11,000 to pay everything off here.
Thanks!
david ingram replies:
If you have transferred $9.600 so far and have paid it out already, there is no problem. If you are transferring smaller amounts because you are trying to amass an amount over $10,000 for a single purpose, then you have to report the transfer of more than $10,000 AND the financial institution you have transferred the money to in the USA should be reporting the transaction as well. In fact making several transfers for a total of $12,000 could make you look like a suspicous person whereas one $15,000 transfer would never raise a suspicious person report, especially if the money was then paid out to credit card companies.
The rules for reporting take place for both countries when there is a transfer (or series of transfers) of more than $10,000.
If you do it as a bank transfer, you do not need to worry. The bank will do the reporting for you.
If you take cash out in Caanda and take it across the border yourself, YOU have to do the reporting to both countries.
This older series of questions will help
This last question just
gave me an idea for a new question:
What if I bring say $15
000 US into Canada but I do it at several trips and
every time I carry less then $10 000 (3000-5000)? Any forms to fill or
report? Thanks.
every time I carry less then $10 000 (3000-5000)? Any forms to fill or
report? Thanks.
PxXXXX
---------------------------------
---------------------------------
david ingram
replies:
Both countries make the
transportation of more than $10,000 in pieces a crime as
well.
However, if you were
sending a $1,000 a month to a savings plan or something, that would not
matter.
The crime would be trying
to assemble the more than $10,000 in the other country when you had the ability
to send it all at once.
I.E. You have
$25,000 in a bank in Seattle and send $5,000 every couple of days until it is
all in Canada.
In that case, if your
banks spotted what was going on, "they" would report
you.
The bank will also report
when several cheques arrive from different sources and they add up to
significant amounts whether the source is from the US or not. This is to
stop people from keeping their money in other people's accounts and assembling
it when they need it.
All part of anti money
laundering legislation.
=============
the original question and
answer follows
What forms do I have to
fill out if I am transporting more than $10,000 across the Canadian
Border
==============================
david ingram
replies: The forms are E677 and E667 for Canada and as of September
1, 2004 )today) 104 and 105 for the US if you are bringing the money out
of the US into Canada..
The US bank will
report the deposit or withdrawal to the US FINCEN on form 4789 (which is
still valid until August 31, 2004) or more likely the new form 104 which you can
find at: http://www.irs.gov/pub/irs-pdf/ffc104.pdf
When you then move
the money to Canada by money order or check, the bank or financial institution
will report it again.
The US penalties for failure to fill in these simple forms is up to
$500,000 PLUS 5 years in jail.
If you remove more
than $10,000 at any one time, the bank will report those transactions as
well.
If you decide to
carry the cash or transport it out of the USA as a cashier's cheque, you have to
file form 105 (old form 4790). You can find the form at: http://www.irs.gov/pub/irs-pdf/ffc105.pdf
Canada has moved its forms
in the last few days and i had a devil of a time trying to find them. You
can find both E677 and E667
below.
http://www.cbsa-asfc.gc.ca/E/pbg/cf/e667/e667-fill-06b.pdf
The E667 is filled out by the Bank or financial institution and you do not usually see it.
The following E677 is filled in by yourself and handed in at the airport OR LAND BORDER to CANADIAN CUSTOMS AS YOU LEAVE OR AS YOU ENTER
On December 25, 2007, David Ingram
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However, I regularly search for the words"PAYING CUSTOMER" and
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$1,700 would be for two people with income from two countries
Catch - up returns for the US where we use the Canadian return as a guide for seven years at a time will be $150 to $500.00 per year depending upon numbers of bank accounts, RRSP's, existence of rental houses, self employment, etc.
Just a guideline not etched in stone.
David Ingram expert income tax service and immigration help and preparation of US Canada Mexico non-resident and cross border returns with rental dividend wages self-employed and royalty foreign tax credits family estate trust trusts income tax convention treaty advice on bankruptcy
It is very unlikely that blind or unexpected email to me will be answered. I receive anywhere from 100 to 700 unsolicited emails a day and usually answer anywhere from 2 to 20 if they are not from existing clients. Existing clients are advised to put their 'name and PAYING CUSTOMER' in the subject line and get answered first. I also refuse to be a slave to email and do not look at it every day and have never ever looked at it when I am out of town. e bankruptcy expert US Canada Canadian American Mexican Income Tax service and help
Therefore, if an email is not answered in 24 to 36 hours,
it is likely lost in space. You can try and
resend it but if important AND YOU TRULY WANT OR NEED AN ANSWER from 'me', you
will have to phone to make an appointment. Gillian Bryan generally accepts
appointment requests for me between 10:30 AM and 4:00 PM Monday to Friday
VANCOUVER (Seattle, Portland, Los Angeles) time at (604) 980-0321.
david ingram
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This is not intended to be definitive but in
general I am quoting $900 to $2,900 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.
$1,100 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
$2,900 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.
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 $150 to $500.00 per year depending upon numbers of bank accounts, RRSP's, existence of rental houses, self employment, etc.
Just a guideline not etched in stone.
This from "ask an income trusts tax service and immigration
expert" from www.centa.com or www.jurock.com or 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,
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