Canadian Property

This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.

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globalite
Posts: 3
Joined: Wed Oct 15, 2014 9:08 pm

Canadian Property

Post by globalite »

Evening All,

I put 20% down on a new condo being built in Canada, ready in mid-2016. I have T4 till November and will likely have W2 in US under L1/H1 visa for a 2 year or longer project there.

I also have TFSA and RRSP, and based on other posts in this thread, it sounds like a good idea to close out the accounts before going to US to file only US taxes and avoid headache of US and Cda taxes.

1. However, I am in a pickle with the condo, which will not be rented and will not be sold anytime soon. What is the best course of action here? Am I forced to file dual tax returns?

2. What is the best way to transfer the CDN funds in CDN bank to US funds in US bank? Does it matter when I transfer the funds, before I go there or after?

As of now, my intent is to return to Canada after, but never know what the future holds.

Thanks.
GlobaLite
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

Well, you don;t want to close RRSP before leaving, as it will be taxed LESS when you are non-resident of canada (IF you become non-resident). But TFSA should be closed before leaving.

Even with a home in canada, by living and working in US, and having a home there (even a rented home) you will be considered deemed non-resident of canada, which is the same as non-resident. Just minimize tall other Cdn ties and maximize all US ties.

The transfer money, make sure the currncy exchange is done in canada, and then remit USD to your US bank.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
globalite
Posts: 3
Joined: Wed Oct 15, 2014 9:08 pm

Post by globalite »

Thanks for the response nelsona.

So, I close my TFSA and then close my RRSP. However, if my RRSP is gaining, even once I stop contributing due to existing funds, I'll then have to declare this as a gain in US taxation? Hence why I was planning on just closing and cashing out. Is this still not a wise move?

As well, I want to keep my CHQ account in Canada to qualify for a mortgage on the property in 2016. I am trying to get a hold of someone at the bank to ask about this.

The TFSA I can close. With the new FATCA rule, it seems Canadian banks will disclose all my holding anyway, which in this case will just be a CHQ account with $1000 balance, no TFSA and maybe RRSP.
GlobaLite
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

What most people do is, just before moving to US, they sell investments inside therir RRSP to "crystalize" any gains they had, thus making onl;y gains after you move taxable in US. The 25% tax you will pay in canada will more than offset any US tax you might incur on those minimal gains.

Condos are sold to non-resisnts all the time, so I would not unnecessaily worry about financing. Establish yourself in US and funding will be available.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
globalite
Posts: 3
Joined: Wed Oct 15, 2014 9:08 pm

Post by globalite »

Thanks for your knowledge Nelsona
GlobaLite
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