Serbinski Accounting Firms

Thanks nelsona for all your help!

Are Social Security and Medicare credits accrued based on time employed or time paid? Since most US employers run payroll in arrears, the first paycheque of the year would include pay from the previous year. For example, a paycheque issued on 2022-01-01 may be for work from 2021-12-01 through 2021-1...

Understood. Just wanted to avoid having to deal with the hassles of FIRPTA withholding and potentially not having access to the withheld proceeds for months. If I am a Canadian tax resident, I would be able to claim the 20(12) deduction on the sale. If I am not a US foreign person, I would not be su...

nelsona wrote: > You won;t instantly be non-resident, so you may be able to sell a few weeks > after leaving US. Do you mean one can be considered tax resident of both Canada and the US at the time of sale, so the FIRPTA withholding is not required in the US and the 20(12) deduction is available in ...

Thanks nelsona for the advice. Your 8 year 2 month scenario is exactly what I am considering. Plus not having to rely on a totalization agreement for Social Security might save some headaches at retirement. My view on having Medicare Part A is not having to worry about emergency medical insurance wh...

Thanks nelsona! Looks like it may be worth sticking around in the US for a bit longer. :)

If one earns 40 Social Security credits by US employment and expatriates from the US years before retirement age, he/she qualifies for Social Security without having to rely on a totalization agreement. Does he/she also qualify for premium-free Medicare Part A at 65 as a non-resident? If so, is Medi...

Many of Canada's tax treaties with other countries have clawback periods of only 5 or 6 years, so the potential tax planning opportunities could be interesting in case some property balloons in value.

Thank you for the information! So unlike the IRS no choice between the accrual and cash methods.

nelsona wrote: > Article, XIII.5 > Para. 4 describes why cap gains are paid by residents. > Para. 5 explains that a state can tax non-residents for a period of up to > 10 years after leaving if it was subject to deferred departure tax. > > If one waits the 10 years, they can no longer tax you. Thank...

Thank you for the clarification. So in this example, in which tax year can the 20(12) deduction be claimed in Canada? Is the tax accrued on the date of sale (FIRPTA withholding) or the date the US tax return is due?

Thanks nelsona for the advice! One last question: Say the US home is sold in 2021 and FIRPTA withholding is withheld from the sale proceeds. The capital gains tax would be "due" on April 15 of 2022. Would the 20(12) deduction for Canada be claimed on the 2021 or 2022 tax return? In either ...

I agree with you that 3(b) excludes foreign real property from treatment in 3(c) and 3(d), but I do not think 3(b) necessarily excludes foreign real property from treatment not described in 3(c) and 3(d), such as a 20(12) deduction without reference to 20(11). Would a request for technical interpret...

Thanks nelsona for the references! From my amateur reading, neither bulletin seems to explicitly exclude real property from the 20(12) deduction. For example, IT-506 paragraph 3(b) allows a deduction for a foreign property that is not real property, but does not explicitly say a deduction is disallo...

Thanks nelsona for the detailed explanation! I totally forgot other capital gains would become Canadian sourced after becoming Canadian resident. Actually have not left the US nor sold the home yet. Just planning ahead to figure out which to do first to maximize any tax savings. Based on what I unde...