To Reside or Not
(THE TAXING QUESTION)
excerpt from
IT ISN'T ALWAYS YOUR DECISION
GOVERNMENT(S) DECIDE FOR YOU
"WATCH OUT!!!"
AMERICAN CITIZENS LIVING IN CANADA
(or any other country)
US taxation is based upon where you perform the work. Where you "claim" to work is not important. Now, if you work in California and live in Vancouver with your spouse and children and earn LESS than $10,000 US, there will likely be no US FEDERAL tax liability because of the US / Canada Income Tax Treaty. However, there WILL be a California income tax liability. This chapter was new for the seventeenth (1990) edition of my Canadian Income Tax Preparation book. It came up because of the number of clients I have who are "out of the country." At any moment, I have over 500 clients who are Canadians living in Barbados, Fiji, Australia, New Zealand, New Guinea, Hong Kong, Saudi Arabia, Kuwait, France, Brussels, and another 50 countries. As well, they live in at least 20 of the U.S. states such as California, Alaska, New York, West Virginia, Nevada, Hawaii, Florida, North Carolina, Tennessee, Washington, Virginia, and Arizona. Note that some states have no (or limited) state income tax. Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming have no state tax. Tennessee has tax on interest and dividends only. New Hampshire taxes proprietorship business income. And, by the time you read this, there will be changes. North Carolina, for instance is making noises about getting rid of its intangible personal property tax (tax on receivables, etc. - yuk). Then, of course there are those who live and work on deep sea oil drilling platforms, or work as sailors on Great Lakes freighters (one such fellow sailed between or Air Crew on Qantas, Canadian Airlines International, Air Canada, BOAC, LIAT, etc., and based in Amsterdam, Sydney, Honolulu, Seattle, or Auckland, New Zealand). And I shouldn't forget people who live in the United States and have property in Canada which they rent out or have made an investment in a brother's Canadian business or a Canadian ski (or even "all season" resort). Some of our clients have Xmas tree farms in Northfield, Minnesota, orange groves in Florida, and almond plantations in California. Others are Finish citizens who live in Germany and work part of the year in the U.S. and part of the year in Canada. My favourite client (sorry everyone else) is likely a U.S. citizen with a wife in North Vancouver and businesses in the Philippines, New Zealand and Washington State. On his last visit, he brought his 84 year old American mother from Seattle. Wife, mother and client were flying off to Manilla the next day and mother was worried because the Sears store at Capilano mall had turned down her Gold Visa Card. "What was she going to do for money on her trip?" A call to her trust officer in Seattle ascertained that her card was okay and NO AUTHORIZATION HAD BEEN ASKED FOR BY SEARS. We had no trouble getting an approval through our own VISA account, so it must have been the SEARS computer system. However, this dynamic lady, who had $800,000 U.S. on deposit in her accounts, was embarrassed and distraught, and it will be a long time before she shops at SEARS again. Then there are the soccer players, the hockey players, the basketball players, the seminar presenters, the Hollywood actors, the Ice Capades skaters, and the odd South American or European or Iranian refugee and the question always arises, "who is going to tax them?" In the case of a Hockey player like Wayne Gretzky, he has to file a "state" tax return in every state in which he played hockey or makes a personal appearance, likely about 22 states. Canadians usually compare their combined federal and provincial taxes to the basic federal U.S. taxes without thinking about the state taxes and extra medical costs. Although some states have NO personal income tax, most do. "Some" (there are over 6,000 current forms) forms and information are given here: State Tax form Number Alabama 40 Alaska * No personal state income tax form (estate /corp yes) Arizona * 140 Arkansas * 1000 California * 540 Colorado * 140 Connecticut * CT-1040 District of Columbia D-40 Delaware 200-01 Florida * No income tax (is tangible personal property / estate / corp tax) Georgia * 500 Hawaii * N-12 Idaho * 40 Illinois * IL-1040 Indiana * IT-40 Iowa 1040 Kansas * 40 Kentucky * 740 Louisiana * IT540 Maine 1040ME Maryland * 502 plus city and county taxes Massachusetts * 1 Michigan * MI-1040 plus 12 city tax returns Minnesota * M-1 Mississippi * 62-101 Missouri * M)-1040 Montana * 2 Nebraska * 1040N Nevada * No state income tax (is a $25 / employee business return) New Hampshire * 1040 for business proprietorship only New Jersey * 1040 New Mexico * PIT-1 New York * IT-201 plus New York City / Yonkers city returns North Carolina * D-400 North Dakota * 37 Ohio * IT-1040 Oklahoma * 511 Oregon * 40N Pennsylvania * PA40R plus Philadelphia city return Puerto Rico No individual income tax return Rhode Island RI-1040 South Carolina * SC1040 South Dakota No Individual income tax return Tennessee * RV-0368 - only interests and dividends included Texas * No individual income tax return (are estate / corp taxes) Utah * TC-40 Vermont * 103 Virgin Islands No personal, corp, estate, income taxes Virginia * 760 Washington * No personal income tax (estate/personal prop / yes) West Virginia * IT-140 Wisconsin * 1 Wyoming * No personal, corporation or estate taxes (*) denotes we have recently prepared returns involving this state) Note that state income taxes range from none to a high of about 10% in California. The personal property taxes are important as well. In the state of Washington, for instance, you can easily get a retroactive $5,000 personal property tax bill on the boat you have kept there for the last 4 or 5 years. Licensing your new Cadillac in the state of Washington will cost you an extra $600 a year in personal property taxes. "WATCH OUT BORDER WORKERS" It used to be that people who lived in the United States and worked in Canada paid no tax to the U.S. because the higher Canadian income tax meant that the U.S. resident got credit for every cent by filing the Form 1116 and claiming a foreign tax credit. That is no longer true if the total income (after the "up to" $72,000 exemption) is over $45,000 for a family or $33,750 for an individual or $22,500 for a married person filing separately. The Alternative Minimum Tax (Form 6251) means that only 90% of the foreign tax credit can be claimed. (Note, AMT kicked in at $40,000, $30,000 and $20,000 from 1987 to 1993 - It is now $22,500, $33,375, and $45,000 for 1994, 1995, 1996, 1997 and 1998). If you are a U.S. citizen who has not filed your past returns, you should catch up your returns from 1987 to the present. We regularly prepare 1987 to 1998 returns for U.S. citizens who have been "caught" or who are just trying to catch up legitimately. For example, in a 1990 return for a man earning $70,000 in Canada and a woman earning $10,000 in the U.S., their Alternative Minimum Tax worked out to about $500.00 U.S. However, if she had made $20,000 in the U.S., there would have been enough U.S. Tax paid that the Alternative Minimum Tax would not have kicked in. Since the 1991 rate for the AMT is going from 21% to 24%, it is expected to more than triple the number of people who will be caught in this situation. Persons in this situation should plan on making sure that they have some U.S. income to knock out the AMT in the U.S. In the above case, I had prepared the return and sent it in, before another return pointed out to me that there was a tax liability under AMT and I had to phone the couple and say "mea culpa". Note that the AMT is 26% for 1993 and 1994, 1995, 1996, 1997, 1998, and 1999. WHERE DO THEY LIVE? What country is going to tax them? The answer is not always easy. I am going to quote directly from the U.S. / Canada Tax Treaty because that is the one we use most often, but the same general rules apply with all treaty countries. At the moment, Canada has signed treaties with 78 countries and is working on another 27. We have had several cases where people have already paid $16,000 or $25,000 in tax to Canada because they are clearly residents under most meanings. However, because of the following "TIE BREAKER" rules, we are getting back all tax paid on dollars earned in the other country. CANADA / UNITED STATES INCOME TAX TREATY 1980 There are many, many treaties. The articles tend to be fairly consistent so that when some one comes in from Indonesia, I am able to quote Articles IV, IX, X, and XI etc., and look like a real expert on Indonesia, even if I have not looked at it before. The following ARTICLE IV for instance has been used by myself more often for Australia and Germany than for the United States. Please also note that a NEW US / CANADA TREATY was signed on August 31, 1994 and with various changes took effect on Jan 1, 1996. Parts of it (estate and capital gains) are retroactive back to November 10, 1988. This new Treaty totally changes the rules between the two countries for estate and capital gains tax upon death. It also completely changes the rules for the taxation of U.S. Social Security, Canadian Old Age Pension and Canada Pension Plan. Gambling losses are going to be allowed for Canadians as well. See the December 1995 edition of the CEN-TAPEDE for more information. The "boxed" parts of the following treaty following are the parts taken out as of January 1, 1996. The treaty as printed is as it should be now. It was slightly different 1980 to 1995. Article IV - Fiscal Domicile - (it is the same number in most treaties) 1980 to 1995. For the purposes of this Convention, the term "resident of a Contracting State" means any person who, under the law of that State, is liable to taxation therein by reason of his domicile, residence, place of management, or any other criterion of a similar nature. But this term does not include any person who is liable to tax in that Contracting State in respect only of income from sources therein. 1996, 1997, 1998 & 1999. For the purposes of this Convention, the term "resident of a Contracting State" means any person who, under the law of that State, is liable to taxation therein by reason of that person's domicile, residence, citizenship, place of management, place of incorporation or any other criterion of a similar nature, but in the case of an estate or trust, only to the extent that income derived by the estate or trust is liable to tax in that State, either in its hands or in the hands of its beneficiaries. For the purposes of this paragraph, a person who is not a resident of Canada under this paragraph and who is a United States citizen or alien admitted to the United States for permanent residence (a "green card" holder) is a resident of the United States only if the individual has a substantial presence, permanent home or habitual abode in the United states and that individual's personal and economic relations are closer to the United states than any other third State. The term "resident" of a Contracting State is understood to include: (a) the Government of that State or a political subdivision or local authority thereof or any agency or instrumentality of any such government, subdivision or authority, and (b) (i) A trust, organization or other arrangement that is operated exclusively to administer or provide pension, retirement or employee benefits, and (ii) A not-for-profit organization that was constituted in that State, and that is, by reason of its nature as such, generally exempt from income taxation in that State. 2. Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined as follows: (a) he shall be deemed to be a resident of the Contracting State in which he has a permanent home available to him. If he has a permanent home available to him in both Contracting States, he shall be deemed to be a resident of the Contracting State with which his personal and economic relations are closer (centre of vital interests); (b) if the Contracting State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either Contracting State, he shall be deemed to be a resident of the Contracting State in which he has an habitual abode; (c) if he has an habitual abode in both Contracting States or in neither of them, he shall be deemed to be a resident of the Contracting State of which he is a national; (d) if he is a national of both Contracting States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement. 1980 to 95. Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, the competent authorities of the Contracting States shall by mutual agreement endeavour to settle the question and to determine the mode of application of the Convention to such person. 1996 on. Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, the competent authorities of the Contracting States shall by mutual agreement endeavour to settle the question and to determine the mode of application of the Convention to such person. Notwithstanding the preceding sentence, a company that was created in a Contracting State, that is a resident of both Contracting States and that is continued at any time in the other Contracting state in accordance with the corporate law in that other Contracting State shall be deemed while it is so continued, to be a resident of that other State. You can see that the countries themselves have set it up so that they will get tax. It is up to you to arrange your affairs to pay the least tax possible. Both Canada and the U.S. will tax you on any money you earn within the country. The BIG question is: WHEN ARE THEY GOING TO TAX YOU ON THE REST OF YOUR WORLD INCOME? Canada taxes on RESIDENCY, not citizenship. Basically, if you have been in Canada for more than 183 days (counting the hours - one hour is only one hour, not one day as in the States), you are taxable on your world income, no matter where it is located and under whose name you have your assets stashed away. That is why Howard Hughes left Canada when he did back in the 70's. If he had stayed in Canada (even as a visitor) two more days, he would have been taxable on his world wide holdings. Note that in March, 1999 Denise Rondpre of Revenue Canada Customs Excise and Income Tax issued a policy letter to Foreign Air Crew flying for Canadian Airlines and Air Canada. This directive stated that it was Revenue Canada's opinion that one hour in Canada constituted a full day in spite of the fact that the courts have ruled against them and the law, itself, has not changed. I do not think that this is enforceable, but you must be aware of it. If you are in Canada for any period and earn more than $10,000, you must pay tax on the total amount to Canada, or vice versa if a Canadian is in the U.S. Entertainers and sports figures are exempt for up to $15,000 but they are to have 15% tax withheld from their gross salaries or remuneration (including hotel rooms, plane tickets, car rentals, meals, etc.). Remember that even though the first $10,000 or $15,000 above is not "taxable", you must file a return and quote the treaty article number specifically to claim the exemption. The U.S. has a minimum $1,000 fine for failure to report the treaty number to claim the exemption, even if there is no tax owing. In practical terms, this means you only get fined if not taxable. (Although this was always here, Revenue Canada rarely enforced the rule. In this case the enforcement laws DID change in March, 1998 and the US resident MUST file if working in Canada.) Remember also, this refers to "where" the work is performed, not where the money comes from. Therefore, if you worked in San Francisco for one month for your Canadian employer and were paid $6,000 U.S. by Bell Telephone in Ontario, you would have to file a California return reporting your world income and exempting the amount earned in Canada and would have some tax to pay to California on the $6,000. On the Federal return, you would file for an exemption under Article XV of the U.S. / CANADA Tax Treaty and pay no federal tax to the U.S. You would then claim a credit for the California tax paid on your Canadian income tax return. You should also get BELL to agree to pay the $400 to $1,000 accountant's bill to prepare these complicated tax returns. The U.S. taxes on citizenship first and residency or physical presence second. If you have another tax home, and are just an extensive visitor in the States, you can escape U.S. tax on your income from other countries. However, if you renounce your other tax home or become a "green card" holder or are in the U.S. for more than 183 days in one year, you are subject to U.S. income tax on your world income. The U.S. taxes its citizens and green card holders wherever they are and no matter what they are doing. The U.S. taxes its citizens in Canada and they will tax them in the North Sea. The U.S. will add on the benefit of housing allowances, car allowances, servants, and education allowances for people who have not been in the U.S. for twenty years but who are still U.S. citizens. If you want the benefit of U.S. Citizenship, you pays your taxes.) The first $70,000 U.S. of income earned from personal services (as opposed to capital) is exempt if you have been out of the country for a full calendar year in one test or for 330 out of 365 days in another test using a fiscal year. However, being "exempt" does NOT mean that you do not have to file a tax return. You must still file your U.S. 1040, report the Canadian Earnings in U.S. dollars and claim the "up to $72,000 U.S." by filing a form 2555 with the 1040. If you have investment, [INCLUDING AMOUNTS EARNED WITHIN YOUR CANADIAN RRSP], rental, royalty, or any income other than from services, you must also report the income in U.S. dollars. Since you will have paid tax to Canada first, you will file a Form 1116 with the 1040 to claim your foreign tax credit. A separate Form 1116 must be filed for each kind of income, i.e. rental, pension, dividends, etc. The RRSP earnings may be exempted under ARTICLE XXIX.5 of the U.S. / CANADA Income Tax Treaty 1980. Social security (FICA) taxes usually do not have to be paid to the U.S. under Article XXIX.4 of the U.S./CANADA Income Tax treaty or Article V of the CANADA / U.S. Social Security Agreement. (I sure hope all this is impressing you). Therefore, a U.S. citizen living in Canada who had a rental house, a job, an RRSP, some dividends and some capital gains from the sale of stock would file his or her Canadian return first and then file a U.S. return with these forms: * 1040 - is the basic return for a citizen or resident of the U.S. or landed immigrant of * Schedule A - to claim itemized deductions if needed * Schedule B - to report the dividend income * Schedule D - to report the capital gains * Schedule E - to report the rental income * 4562 - to report depreciation on the rental house * 1116 - (maybe two foreign tax credit forms) - one for any income from services over $72,000, one for the rental, capital gains, and dividend income. * 1116(AMT) - two more forms to calculate the foreign tax credit for Alternative Minimum Tax purposes (AMT) * 2555 - to exempt up to $72,000 U.S. of earnings from services * 6251 - Alternative Minimum tax form * FICA (Social Security) exemption - to exempt income from U.S. FICA * RRSP election forms to exempt income earned within the RRSP from current U.S. income tax until withdrawal * TDF-90 form(s) - to report foreign bank accounts including Canadian RRSP accounts which are considered "foreign trusts" - failure to file this form can result in up to a $500,000 fine PLUS up to five years in jail He or she might also have to file either of the following two specialty forms when he or she owns shares in corporations. * 5471 form - If you are a U.S. citizen and 5% or more owner of a Canadian corporation. Failure to file this form can create fines of $1,000 every 30 days up to $25,000 * 5472 form - If you are a Canadian who owns a U.S. corporation - failure to file this one has fines of up to $30,000 every 30 days. Even though you or your friend have not filed your U.S. return for years, you have not necessarily "got away with it". At least once every two weeks, a U.S. Citizen arrives "a little distraught" because the IRS has caught up to them. And the biggest problem is that they can tax you for many years, whereas you might only be allowed to claim your exemptions and credits for two or three years back. For instance, In January, 1995, I had a "new" U.S. citizen client bring me a U.S. Tax bill for $194,000 for 1986, 1987, and 1988. He had been "caught" because he had applied for a new passport. The tax was on the gross income he had received in those years when he sold off a stock portfolio (remember the crash). Although he made about $40,000 to start, he lost after the crash and ended up $30,000 down. A Canadian accountant told him he did not have to file U.S. returns because he was living in Canada. In another case, a lady who had come to see me ten years ago and had gone to see someone else because (this is what she told me) they had a fancier office, has suddenly received a rude awakening. She and her husband have been losing money on the rental of a large apartment complex in Seattle. The penalty for not filing and reporting this rental income is up to $10,000 a year for not filing on non-resident rentals and 30% of the gross rent with no expenses allowed. In this case the rent is over $500,000 a year and the total penalty and tax could be $2,000,000 with interest. The other accountant told her she did not need to file if she was losing money. I had quoted her $500 to do her return ten years ago and told her she had to file the return. The accountant with the fancier office told her she did not have to file because she lost money. (That advice is wrong in both countries by the way). Even $1,500 a year would be cheaper than the tax bill coming up. If you are still claiming the protection and advantages of your U.S. citizenship, do yourself a favour. Bring your U.S. income tax returns up to date from 1987 to the present. It is rare that you will have to pay tax to the States. Higher Canadian tax rates mean that, with the exception of Capital Gains, the exemptions and foreign tax credits "almost always" eat up the U.S. tax. If you do have Canadian Capital Gains, it is usually important that you do very accurate calculations to determine the tax. If you claim the $ 100,000 exemption in Canada, the U.S. does not recognize it and will tax you anyway. Better to save the exemption or in some cases restructure the deal. Restructuring might be as mundane as selling a business for less purchase price and taking more wages to remain as an advisor. That takes care of the majority of U.S. Citizens in Canada. Now to the Canadian "visitor" to the U.S. - note that these ten year old "NEW RULES" mean that many "Canadian Snowbirds" are taxable in the U.S. on their World Income, even though they are only in the U.S. for four months a year. What happens is that after three, four, five or ten years of wintering in Florida, or Texas, or Arizona, or California, the Canadian visitor joins clubs, buys property, attends meetings, becomes active in a condo association and suddenly finds their "CENTER (CENTRE) OF VITAL INTERESTS" is as much or more in the U.S. as it is in CANADA. Under those circumstances, the U.S. government has every right to tax you. At the back of the book around page 156, I have reproduced the April, 1994 edition of the CEN-TAPEDE newsletter for more information on this. Long Time Visitors In addition, to arrive at the 183 days, the U.S. looks at the two preceding years. You have to take 1/3 of the days you were present in the U.S. in the preceding year and add it to this year's days and then you have to take 1/6 of the days in the year preceding that and add it to this year's days. Soooooooo! if you were in the States for six months in 1998, that counts as 1 month, or 30 days for 2000. If you were in the States for three months in 1999, that counts as 1 month or 30 days for 2000. You are now limited to stay in the States for 120 (maybe 122) days in 2000, after which you become taxable on your world income unless you can show a tax home in another country (as in the treaty provisions above). There is a form called an 8840 that you may file to claim exemption from this if you can show that your closer connection is to Canada. This is tough to do however. As I was writing this little part on Sept 29, 95, I received a call from a 55 year old man in Alberta. He has a home in Canada, is retired already and spends the winters golfing at his golf course condominium in Arizona. In Arizona, he golfs, plays cards, goes to church and visits with friends in the same golf course country club estate. In Canada, he visits his kids in B.C. and travels in his motorhome. He can't wait to get back down south where he now lives in his mind and which is fast becoming his centre of vital interest and "closer connection." His Canadian friends have died, divorced, moved away, are still working or go south to different places to spend their winters. His closer connection, "his home" without much doubt, is now in the U.S. The following is an article I wrote for Joe Martin's Vancouver Business Newspaper in November, 1989. (note that rates/amounts have been changed) Canadians with property and investments in the U.S. are looking at a big surprise when they sell out or when they die. The U.S. government is looking for their pound of flesh and they are getting it. A Non-Resident and Non-Citizen of the U.S. who owns property in the U.S. can be in for a RUDE AWAKENING when they sell it or die. For instance (ignore exchange please), if you sell a place in Palm Springs and made $100,000, that $100,000 profit might have been your tax free $100,000 exemption in Canada. But - the U.S. will tax the full $100,000 anyway so there might not be any sense in claiming it tax free in Canada if you have another item you could have used on your T664 Canadian exemption election form. (Report the profit and claim a foreign tax credit on your Canadian Return) If you die, the situation becomes even worse with the possibility of a capital gains tax and an estate tax. A form 706NA must be filed and if, for example, The taxable US estate is valued at $100,000 there would be $8,200 to pay (18% of first $10,000, 20% of next $10,000, plus 22% of next $20,000 [$100,000 - $60,000]) of Federal Tax. As well there might be a State Tax (different for each state) which can usually be used as a partial deduction against the federal tax. The new treaty took effect as of Nov 11, 1988 and will also allow the U.S. estate tax to be credited to Canadian Capital gains tax. The new rules work like this. Everyone now gets a $625,000 (proposed to go higher) exemption for U.S. estate taxes. If you are a non-resident and non-citizen of the U.S., this exemption is modified in the following manner: I know that the exemption is going to $675,000 and maybe a million, I have used an old calculation here. The total WORLDWIDE assets must be counted. Let's assume that the total is $1,500,000. If the U.S. part of these assets was a $300,000 U.S. condominium in Palm Springs, the estate exemption would be: $1,500,000 x's $625,000 = $125,000 Estate tax would be payable on $175,000 U.S. ($300,000 - $125,000). Gift tax rates (form 709) and estate tax rates (forms 706 or 706NA) are the same once the exemption is passed. The reason that the rates are the same is that any gifts made up to 3 years before death are added back into the estate. Gift tax is dangerous. Remember that the "payer," not the recipient (unless the recipient is not available or broke after giving everything away), pays the gift tax. The exemption for everybody is $10,000. If you have a spouse who is a resident or a citizen of the U.S., you may give any amount to your spouse. However!, if your spouse is a non-resident of the U.S., that gift is limited to $100,000 U.S. Therefore, if you are a Canadian and you decide to give the $100,000 summer home in Bemidji, MN, or your Palm Springs, CA, condo, or your Cape Coral, FL, condo to your 4 children, if you do not do it in "$10,000 each per year" stages, you will have significant gift tax to pay. The same thing can happen when you put your "new" non-resident spouse's name on the Palm Springs condo when the value is over $200,000 or when you put your children's names on your bank account in Canada if you happen to be a U.S. citizen living in Canada. The following rates of gift and estate tax apply: CEN-TA Cross Border Services - Tax, Visas, Immigration
Column A Column B Column C Column D
Rates of Tax
Taxable Taxable Tax on on excess Amount
amount amount in over amount
excess
-- 10,000 ---- 18%
10,000 20,000 1,800 20%
20,000 40,000 3,800 22%
40,000 60,000 8,200 20%
60,000 80,000 13,000 26%
80,000 100,000 18,200 28%
100,000 150,000 23,800 30%
150,000 250,000 38,800 32%
250,000 500,000 70,800 34%
500,000 750,000 155,800 37%
750,000 1,000,000 248,300 39%
1,000,000 1,250,000 345,800 41%
1,250,000 1,500,000 448,300 43%
1,500,000 2,000,000 555,800 45%
2,000,000 2,500,000 780,800 49%
2,500,000 3,000,000 1,025,800 53%
3,000,000 10,000,000 1,290,800 55%
10,000,000 21,040,000 5,140,800 60%
21,040,000 ---- 11,764,800 55%
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