From US back to Canada on international assignment

NewCanadian · Post by **NewCanadian** » Mon May 02, 2011 9:16 pm

I left Canada 3 years back on TN and bought a house in US about two years back. I am in US on work visa.

I am offered international assignment to Canada for a period of min 2 and max 3 years.

My questions are-

How is US tax determination done in second and third year following my start working in Canada?

How does deemed disposition affect my US home when I leave Canada at the end of assignment? Do I have pay or give security for my home in US?

How does leasing my US home while I am away, affect the deemed disposition?

nelsona · Post by **nelsona** » Tue May 03, 2011 6:40 am

You will cease being US resident as son as you return to canada.

Unfortunately, because you were only outside of canada for 3 years, deemed dispostion will apply when you leave again.

Your home in US can however be designated as your principla residence while in Canada, but only if you do not rent it.

NewCanadian · Post by **NewCanadian** » Tue May 03, 2011 8:32 pm

Nelsona,
Thanks.
It may be difficult to paying US home mortgage without renting for long period so I need to prepare for future deemed disposition when I return from Canada back to US.

What is deemed disposition formula and how does it work?

When I leave Canada, I am expected to pay 50 % of capital gains (i.e. US property value at time of leaving Canada- Purchase price) but as long as deemed disposition is lower than C$ 100,000, I donot need to actually pay but can defer it till I sell it?

If I sell in future, while I am in US when I sell, how do I pay it?

Sorry for asking basic questions.
Thanks again.

nelsona · Post by **nelsona** » Tue May 03, 2011 9:42 pm

The deemed disposition would involve ONLY the gain from the time you enter canada until when you leave.