In Canada since two months old
Moderator: Mark T Serbinski CA CPA
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Littlest Hobo
- Posts: 2
- Joined: Wed May 19, 2010 7:01 pm
In Canada since two months old
I was born in the U.S. to Canadian parents who were studying there briefly. They brought me back to Canada when I was two months old. I am now 58 and recently discovered I am a U.S. tax citizen with obligations of about $135,000 in capital gains on my principle residence. I am single and have never worked or earned money in the U.S. What do I do?
Why would you think tthat you owe money on the house, but not on any of the other income you've erned over the years?
You need to file returns for the past six years.
You need to file returns for the past six years.
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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Littlest Hobo
- Posts: 2
- Joined: Wed May 19, 2010 7:01 pm
I am up to date on all my tax filings. I get a $250,000 capital gains exemption on the sale of my house, which is worth about $2 million. Unlike American citizens resident in the U.S., I cannot claim my mortgage interest. Plus I get penalized on the declining value of the U.S. dollar. When I bought my house for $750,000 the Canadian dollar was worth 65 cents U.S. Now it is almost par. That's a 35 cent penalty in my disfavour. Bottom line is that I pay 15% on my capital gain after exluding my improvments etc, or about $150,000. All of my earnings throughout my life were in Canada. I came here as a baby, I use no U.S. services, am not eligble for U.S. social security, yet the U.S. government me to pay them $150,000.
I'm gald to see you've kept your filing current. The vast majority of USC do NOT.
[quote]Unlike American citizens resident in the U.S., I cannot claim my mortgage interest. [/quote]
Of course you can. It may not be as useful as it would were you not living in Canada, but there are no deductions or exclusions that are not available to you. Likely you aren't even taxable in US, so I do know what you mean, just want to make it clear for others that your statement is not correct.
As to your cap gains, this would be the case regardless of where you live. The Cdn dollar turn around made the situation worse for you.
You could get married, that would take another 250K of the gain.
This upper limit on gain exclusion was a sop to the realtor industry, motivating people to move to trigger their gains more often to avoid exceeding the limit. had you sold and bought a couple of times in the intervening years, you could have made another $500K (or a million with the missus) tax free.
Might I suggest you trigger some taxable cap gains (and/or other passive income) to at least get some foreign tax credit play?
[quote]Unlike American citizens resident in the U.S., I cannot claim my mortgage interest. [/quote]
Of course you can. It may not be as useful as it would were you not living in Canada, but there are no deductions or exclusions that are not available to you. Likely you aren't even taxable in US, so I do know what you mean, just want to make it clear for others that your statement is not correct.
As to your cap gains, this would be the case regardless of where you live. The Cdn dollar turn around made the situation worse for you.
You could get married, that would take another 250K of the gain.
This upper limit on gain exclusion was a sop to the realtor industry, motivating people to move to trigger their gains more often to avoid exceeding the limit. had you sold and bought a couple of times in the intervening years, you could have made another $500K (or a million with the missus) tax free.
Might I suggest you trigger some taxable cap gains (and/or other passive income) to at least get some foreign tax credit play?
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