Serbinski Accounting Firms

I assume form T2062 and T2062A were completed on sale and certificate of compliance issued?

Only the capital gain and tax withheld on T2062 goes on the T1 non-resident return. Form 776 is left completely blank on the non-resident return.

You are over thinking this. Think about it this way. You ...

Ah wow, I now see what you were saying. Sorry, it’s been a long tax season and a busy last day. Glad to hear we are in agreement on the posters residency status.

Thank you for the historical context, I was not aware of some of this information.

Great point about him taking up residence in a ...

Either you did not read my post carefully or you are missing my point. The poster in question left in April. I said he could only be considered a resident of the US IF he stayed in the US for the rest of the year, and he did not. So, I’m in agreement with you, he was never considered a US resident, but was a factual resident of Canada.

I realize the treaty tie-breaker rules can’t be applied unless he’s also a resident of the US. IF he stayed in the US for the rest of the year after his arrival in April, he would have met the SPT that year. So, IF he had a house back in Canada he would be considered a resident of both Canada AND the US at the same time and the treaty tie breaker rules WOULD have to be applied (this is why I said “He did not mention if he kept a home in Canada or was just renting before he leftâ€￾). I assumed this would be understood by this comment.

If he did have a house back in Canada, he would tie the first test and move on to the second test (economic interests). Because he brought his family with him and works there, he no longer has any primary ties to Canada and would almost certainly be considered a deemed non-resident of Canada.
If he did NOT have a home back in Canada, then he would simply be an emigrant. Would you not agree that this is how this scenario would have played out IF he stayed in the US the rest of the year?

A very similar situation happened to me with one of my client's but over two years, not the same calendar year.

A couple moved to the US when the husband got a 3-4 year work contract. They had every intention of staying in the US, so I prepared them for a proper departure. Then the husband's mom ...

This was poorly worded. By in hindsight, I meant that on the DAY he took his family to the US, started working, presumably started renting in the US (not living in temporary housing) he DID establish ties in the US. Enough ties to be considered a resident of the US IF he stayed there the rest of the ...

In my opinion this would NOT have to be included on the T1135. The Cost amount is defined in subsection 248(1) of the Act and generally would be the acquisition cost of the property. In other words the ACB. There is no ACB or cost amount associated with homeowner's insurance.

Good catch Nelsona. I knew this document existed, but did not bother to read all 48 pages until now. I assumed the same rules applied for brand new Canadian's AND returning Canadian's, but CRA has definitely distinguished between the two.

With regards to your moving expenses. As Nelsona touched on above, you generally can't claim your moving expenses when leaving the country. However, your situation is very unique because you moved back to Canada within the same year.

The rules state the following:

If you meet all the conditions ...

You're missing the point on this Canadian source income on your US return.

The additional $1875 of US tax is the US tax paid on the $10K of Canadian source income on the US return. Canada is not going to give you a foreign tax credit for US tax paid on Canadian source income.

In this example, I ...

Correct on the FTC calculation assuming all the income in your calculation is US source income (you didn't specify). Would look like this if you also had Canadian income.

-your US annual income: 100k
-your Canadian investment income $10K
-wife annual income: 50k
-joint US tax liability: 30k ...

Yes correct on the FTC calculation.

I thought you had non-registered Canadian div's and interest? Keep in mind that the interest and the div's you earned BEFORE departure still have to be included on your departure return as well (Jan 1 to Oct 1).

The Part XIII withholding on the div's only ...

I misunderstood your first question about the FTC's. I think what you were asking is how do you claim US tax paid in Canada, not the reverse.

It's basically like I said for the US side but in reverse, except that you need to break it down further for EACH of you.

So you would calculate HER US ...

Also, if you have any personally owned life insurance, it needs to be reported on the T1161 form as well.

You should also consider filing an election on the US side under Article XIII:7 to "bump-up" your ACB of non-registered investments on the US side. This will eliminate potential double taxation (timing mismatch of FTC) when you ACTUALLY sell these. You will need to submit T1243 with 8833 treaty ...

1) yes
2) yes, and yes Schedule 7 is still required
3) Yes T1243 is required for non-registered investments deemed to be disposed. T1161 is also required if total value of all applicable assets is over $25K. Keep in mind that technically you are supposed to even put personal use property, such as ...