Past years tax returns for Canadian working in US on TN

shan2010 · Post by **shan2010** » Thu Feb 03, 2011 7:24 pm

I have been living and working in US since September 2005. My wife moved to US in 2006 and now she lives with me in US. She never worked nether in Canada or in US.

I filed 1040NR for 2005 using US income (~ 20K) only. Then I filed Canadian Tax for 2005 using Canadian Income only as resident.

I have HBP in which I took around 15K to buy a house in Canada in 2003. I have net negative rental income for 2006, 2007, 2008. I have net rental income for 2009 and 2010.

I have been filing 1040A in US using US income only (not world income) for 2006, 2007, 2008, and 2009.

I have Canadian banks accounts and Drivers Licenses. I did not inform the banks the US address. I did not cancel the Drivers Licenses or the Health card (but never used the Health card). But sold my Canadian registered car in Canada in 2010.

I havenâ€™t done any Canadian Tax since 2005.

At this point what are my options to correct it?

Can I file 2006, 2007, 2008, 2009 Canadian Tax return as resident in world income?

nelsona · Post by **nelsona** » Fri Feb 04, 2011 5:57 am

You need to see a pro.

You have filed incorrectly in every year inccluding 2005, in either country.

JGCA · Post by **JGCA** » Sat Feb 05, 2011 5:23 pm

Seems like you will have a problem on the rental property in Canada no 25% witholding tax was take off on the Gross Rental ( you can have it done on the net but it has to be elected annually in advance).

First amend the US returns to show the CND rental income, file sec 216 returns on the Canadian side for the rental income ( this has nothing to do with world income it only takes care of rental) and I do not see anything else having to be filed in Canada unless you have CND investment income then have to file a return for this, you should inform the bankks to withold cnd tax on the investment income this way you are done with having to file a return for that.

Your biggest problem is the witholding tax on the rent in Canada so file the 216 returns for all years in question this should take care of the rents but you may be subject to some interest for not witholding but it should not be major, then amend to 1040 to include the rental income of canada if this was not reported to the IRS previously.

nelsona · Post by **nelsona** » Sat Feb 05, 2011 6:19 pm

Not quite. There is also the issue of the HBP, which became due in 20005, and the entire exit return.

JGCA · Post by **JGCA** » Sat Feb 05, 2011 7:36 pm

Of course you have many issues as mentioned, I selected the Rental as a very important issue because of the problem of the Gross Rental not being as witholding tax , this will really become a problem if you try to sell the property while a non resident the CRA will ask you if you ever filed 216 tax returns, so for me its a very important point, but as you see you have many other problems to deal with also.

nelsona · Post by **nelsona** » Sun Feb 06, 2011 7:28 am

That's why my original answer -- to get this addressed professionally -- should really be his only action.

nelsona · Post by **nelsona** » Sun Feb 06, 2011 7:34 am

JG, Indeed the tax liability on his rent will be astronomical, since the year deadline has past for 216 for many of these years, so 25% on gross rent will be owed.

JGCA · Post by **JGCA** » Sun Feb 06, 2011 7:24 pm

Yes, Nelsona it would be monsterous to say the least and what about the penalties.