If a US citizen, who lives in the US, buys and then sells property in
Canada, is there any withholding tax in Canada at the time of sale?
The IRS of course ia interested in the capital gains.
Thanx
US citizen buying & selling property in Canada
Moderator: Mark T Serbinski CA CPA
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denisharlock
- Posts: 27
- Joined: Sat Feb 03, 2007 10:31 pm
Since it is Cdn real estate, CRA is of course interested in the capital gains as well.
The non-resident seller MUST file 2 documents with CRA before or at the time of sale, otherwise 25% of the sale (not just the proceeds) would be withheld, and a penalty for not filing the forms would also be due.
In all cases the seller would file a Cdn non-res return to calculate the exact tax owed to CRA, and would use this tax as a credit of his US return.
This is exactly analoguous to a Cdn resident selling a a US property.
The non-resident seller MUST file 2 documents with CRA before or at the time of sale, otherwise 25% of the sale (not just the proceeds) would be withheld, and a penalty for not filing the forms would also be due.
In all cases the seller would file a Cdn non-res return to calculate the exact tax owed to CRA, and would use this tax as a credit of his US return.
This is exactly analoguous to a Cdn resident selling a a US property.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
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denisharlock
- Posts: 27
- Joined: Sat Feb 03, 2007 10:31 pm
The fine for not filing the form is regardless of cap gains or not.
Just look at the forms on the CRA website:
http://www.cra-arc.gc.ca/tx/nnrsdnts/cm ... properties
Just look at the forms on the CRA website:
http://www.cra-arc.gc.ca/tx/nnrsdnts/cm ... properties
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
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denisharlock
- Posts: 27
- Joined: Sat Feb 03, 2007 10:31 pm
As always, you are 100% correct !
Thanx for the info.
To summarize from the CRA website, for others that are interested:
Seller MUST file the proper form within 10 days of the date of disposition.
If you do not, purchaser is entitled to withhold 25% of the proceeds !
With completed form you owe 25% of the capital gain as a 'fee'.
You must then file an income tax return for that year to CRA, including the 'approval form' that you receive back !!!
Thanx for the info.
To summarize from the CRA website, for others that are interested:
Seller MUST file the proper form within 10 days of the date of disposition.
If you do not, purchaser is entitled to withhold 25% of the proceeds !
With completed form you owe 25% of the capital gain as a 'fee'.
You must then file an income tax return for that year to CRA, including the 'approval form' that you receive back !!!
Not quite accurate, but close.
The purchaser is REQUIRED to withhold 25% of the purchase price, no option, if the non-resident is not in compliance.
If he is in compliance, he only has to withhold a calculated percentage, which may be as little a zero.
The purchaser is REQUIRED to withhold 25% of the purchase price, no option, if the non-resident is not in compliance.
If he is in compliance, he only has to withhold a calculated percentage, which may be as little a zero.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best