Moving to US, Renting house in CAN, FMV less then purchase.

[hello3520]

I became a US resident this year, and I started renting out my house in Canada when I moved to the US.

I got a FMV, thinking that I would elect to have disposed of the property when I ceased to be a resident of Canada.

The FMV is slightly less ($5,000) then what I had originally paid for the property, so I would be disposing and re-acquiring the property for less then my original purchase price.

My thought is that I should not bother with making the claim to the IRS under the tax treaty, as it looks like they will charge me capital gains on the original purchase price.

As for depreciation, since I started renting it out the year I immigrated, I will start the 40 year depreciation from the date it was no longer my primary residence.

Is there any flaws in my thinking to not bother with the tax treaty election?

[nelsona]

Sounds right. Elections are just that. Not forced.
But just so you are clear, this election is not governed by the same rules as the one that treats your deemed dispositions on other investments. Your house was not deemed sold by CRA (you would be making an election to do this in Canada), so you don't lump this in with your other deemed dispos (the ones you have no choice about on your dpearture return).