Thinking of returning to Canada from the US...

bstgodda · Post by **bstgodda** » Tue May 01, 2012 1:07 pm

My husband is currently working (H1B Visa) in Florida. We (my husband, me and our 12yr old son) left Canada Dec 30, 2011, we sold our house before we left however have not closed bank accounts or cancelled credit cards just yet. We are wondering what the tax implications are if we go back soon (in the next few mths). FYI...I am not working. We filed our 2011 tax returns with Canada so that is complete.

Will we have any tax implications on the sale of our house upon our return?

What exactly is the departure tax? Is that something that will affect us?

We plan to work when we return to Canada, will my husband have to file a US tax return for the time he worked in 2012?

Anything else that could negatively affect us from a tax perspective?

The requirements of the position that my husband accepted have changed drastically since joining this company which has us wondering if we should just return to Canada.

Any insight is appreciated.

Thanks...
Confused!!

nelsona · Post by **nelsona** » Tue May 01, 2012 1:12 pm

Of course he can return to canada.

The house sale is in the past, and was dealt with on your 2011 return. You should have put a 12/31 departure date on the return.

Departure tax is properly called deemed disposition upon departure tax. It means that almost all your investments are deemed (pretended) to be sold the day you left.

Given that you did not indicate departure, and given you will soon return, you are probbaly best to simply act as if you never left, and report all the income you make this year as if your husband had simply travelled to US temporarily to work.

bstgodda · Post by **bstgodda** » Tue May 01, 2012 1:19 pm

Thank-you so much this is great information.

Just to clarify we put a departure date of Dec 30, 2011 on the T1 General tax returns is that bad???

Thx!

nelsona · Post by **nelsona** » Tue May 01, 2012 2:25 pm

No, it is not bad, and actually will make you "returning" tax return easier, as you will put the date you came back, and not have to report any of your US income.

As long as you took care of any deemed disposition tax and reports, you are fine.

bstgodda · Post by **bstgodda** » Tue May 01, 2012 2:32 pm

Hmmm...not sure what you mean by "As long as you took care of any deemed disposition tax and reports, you are fine." When we filed our 2011 taxes we did not fill out the T1243 form as we had already sold our house before we left and had the $$ in our accounts prior to leaving Canada. Is there something else we should be aware of??

Thanks again for your help!

nelsona · Post by **nelsona** » Tue May 01, 2012 3:49 pm

Well, you yourself answered your own question. If you had no investments which were to be reported on T1243, then you have taken care of deemed disposition.

Your house wouldn't have gone on that form anyways.