QUESTION:

Hi,I recieved unemployment in 2006 but I did not work.I recieved a 1099G form. I was woundering if i have to file taxes because i don't have any W2? Thanks,
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david ingram replies:

The 1099G form amount goes on line 19 of your 1040.

My question is: US-specific

QUESTION: I am getting divorced. My soon to be ex-husband (stbxh) has offered me cash in lieu of structured alimony. Here is the deal...We sold our house in Maryland in Sept. 06. We had 200K in profits. We bought land in Maine with 1/2 and put 1/2 in a moneymarket account (we were going to move to Maine and build a house then the marriage hit the skids). Anyhoo, I am using the 1/2 in the bank to purchase a house for myself (I settle April 30, 2007). STBXH has offered me the other 1/2 of the money in lieu of alimony as I mentioned(we sold the land, it closes this week, we broke even on it, maybe a small loss of a few hundred dollars). We are both still in Maryland. My question is: Will I get hit with capital gains on the 100K? We did not profit on the Maine land and I look at the money as proceeds from our home sale in Sept. 06 What do you think?

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david ingram replies:

As described the $100,000 is tax free. Sorry - always tough when a marriage breaks up.

QUESTION:

My wife is an American citizen and Canadian Permanent Resident and I am a Canadian citizen and we both reside and work in Canada. My wife has to report annually to the IRS but do I, as her spouse and (I guess) as a non-resident alien) require a Tax ID (requested using form W-7) to be reported on her income tax return? If so, are there any other obligations I am required to fulfill by having an ITIN, like having to report to the IRS myself?

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david ingram replies

This was rejected but while doodling at 1:00 AM and looking at rejected emails, I decided to answer it.

There is no need for you to get an ITIN unless your wife needs you for an exemption which usually only occurs when you sell your house for a big profit.

However, If you do get an ITIN, it does not create any reporting requirement with the IRS unless you do something that needed to be reported whether you have an ITIN or not. Winnings in Las Vegas or Atlantic City might be one example.

The main reason you likely want an ITIN is to keep peace in the family. Your wife would be much happier if you had one and she could put it on the tax return and feel just a little more legitimate if you know what I mean.

Says he, the one with six or seven ex-wives.

Do as I say, not as I do.

Hi David,
>
> After much reading around on the web and asking CPAs here I decided to send you this email.
>
> My company moved me from Quebec, Canada to Boston, MA in Sept 2006.
> We sold our house in Quebec at end of Aug 2006 and do not own a house in US. We declared ourselves non-residents of Canada in Oct 2006.
> I am a Canadian citizen in the US on TN and my wife is a Canadian permanent resident on TD in US.
> I contributed to RRSP in 2006 and continue to own them there - no contributions beyond 2006.
> I contributed to 401k in US in 2006 also.
> I am the only one with income in the house; my wife had no income in Canada either - no kids.
>
> 1. What are your estimated charges for filing US and Canadian (including Quebec) taxes for 2006 for me and my wife ?
> 2. Do you have time to file taxes for 2006 in US or will we need to file for an extension?
>
> If you could call and clarify I'd appreciate it.
>
> Best regards
>
>
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david ingram replies:

I generally quote $800 to $2800 for a US Canada tax returns. with the departing Canada move, the multiple RRSP accounts, TDF 90 requirements, Quebec and Massachusetts returns, I would estimate that you are in the $1,300 to $1,500 Canadian range. You can check the suggested price list below.

If you reply, ensure that the subject starts off the same or you will likely be spammed out. I am receiving up to 500 inquiries like yours a day and am really only answering existing clients at this time and as you can see, am answering this at 1 AM in the morning..

We can get Them ready for Canada's deadline but you or us should file a US extension to make sure that we are not embarrassed by something caught in the mail.

QUESTION:

How do I handle my real estate taxes if I am Canadian citizen (nonresident) working the USA with a rental property in Canada?

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david ingram replies:

CANADA

You should have filed an NR-6 first before the first month's rent. Then your agent should have filed a NR-4 Supplementary for the rent and any tax deducted by March 31, 2007 for the 2006 year.

Then you must file a Canadian Rental return with a T776 under Section 216(4) for 2006 by June 30th.

USA

Then you convert the figures on the T776 to US figures and put them on US forms Schedule E and 4562. If there was any income tax paid to Canada, you use US form 1116 to claim that credit on your 1040.

QUESTION:

For the last few years, we have been filing the TDF 90-22, listing our Canadian RRSPs.

How does a Canadian pension plan get accounted for? There is an estimated annual pay out amount, but it's not like a determined RRSP account over which I have control
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david ingram replies:

At the moment, for the most part, Canadian company pension plans are not being reported because no one has really figured out how to account for them and they are not voluntary and are not in your control.

That is my understanding and I am willing to be corrected but no one I know is reporting their company pension.

However, you do not mention form 8891 which must be used to report the internal earnings of your RRSP. The penalty for not filling in form 8891 is 35% of the amount in the RRSP plus 5% of the balance for each year you do not report it.

QUESTION:

I just moved back to Ontario, Canada after 7 years of loving in Virginia. I will continue to work the same U.S. company that I worked for while living in VA. Basically, I will be working from home. My question is, what do I need to do in order to comply with Can. Us Tax Treaty? Are there forms to fill out and send to the IRS? Also, my employer is not sure what they need to withhold...or if they should withhold anything and basically pay me cash and I will pay taxes here in Canada. What about FICA and all FUTA and unemployment?
Thank you. I appreciate all the help I can get.


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david ingram replies:

This older question will help you:

QUESTION:

Hi,

I'm an American citizen residing in Canada (permanent resident) and working for an American company remotely from home in Canada. I get a W2 at year-end. I assume I have to file both US and Canadian tax returns.

My questions are :
1) Do I file a US tax return and claim a foreign tax credit on my Canadians tax return. Or is it vice versa?
2) Do I still file state/local tax return in the US (I lived in Maryland prior to landing in Canada), even though I now reside in Canada?
3) For the extra tax I end up paying to the 2nd country (in excess to what I pay to the first country), can I claim any type of credit or deductions on that tax in next tax year?

QUESTION:

For 2006, I worked in Oil exploration for an Amercan company. My work place was Brazil and my spouse lived in Canada.I have bank accounts and driving license in Canada. My physical presence in Canada for 2006 was 152 days(not consecutive).
How will my income be taxed?

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david ingram replies:

You were clearly a taxable resident of Canada. file your Brazil return and then report the earnings again on lines 104 and 433 of your T1. Claim the tax paid to
Brazil as a foreign tax credit on line 433 of schedule 1.

Dear David,
>
> I'm not sure if this falls under your domain but I am a realtor here in BC and was
> wondering what to do to be able to practise as a realtor in the US? I am not sure if real estate
> qualifies for a TN or a H visa. Perhaps a B visa multiple entry?
> I do know that certain states allow non US citizens to take their licensing programs as a realtor and
> brokerages there may be able to take you in as such.
>
> Thank you for your advice,
> _____________________________________________________________________________________
> david ingram replies:

You can go to the US and investigate real estate deals for a Canadian client as a market researcher. You can not negotiate for that person however.

If a Real Estate Company wanted to hire you, you could qualify as an H1.

And one other small possibility is that you could be hired as a Management Consultant under a TN. Mayube to advise a US realtor on dealing with Candians.

But as a TN Management Consultant you can only give advice and must be paid a salary. You must have 5 years experience as well.

GOTO www.centa.com and read the 'Entering the US' section in the second box down on the right hand side.