question for capital gain of selling my houses in Canada etc

zhangym · Post by **zhangym** » Sat Mar 24, 2012 4:59 pm

This is the first time I am using this forum, and I am just throwing my questions here hoping someone can help me out.

I moved to NY on May 7, 2011 and I sold my Canadian properties right away following my move.
First of all, does the capital gain for US tax period start counting when I enter US or it starts counting when I obtain TN visa?
My second question is: I sold my main residence on August 2011, which I bought in July 2009. I checked the IRS rule saying that although I owned the property for 2 years, but I didn't live in it for 2 years (I moved to US before July 2011), so I am not eligible for capital gain exemption. However, My third question is:I purchased a new house this year in NY, is there way I can use my newly purchased home to offset the capital gain I have to pay?
My other rental property in Canada was sold in July 2011, which I used as primary residence from Feb. 2007 until July 2009 (purchased in Feb 2007). How do I calculate/convert this to the US capital gain by IRS rules?
ï¼±ï½•ï½…ï½“ï½”ï½‰ï½ï½Žã€€ï¼ƒï¼”ï¼š I used to to live in Quebec before I moved to NY. When I use my foreign tax credit for filing IRS, can I use both federal and provincial tax?

Thanks in advance!

JGCA · Post by **JGCA** » Sat Mar 24, 2012 8:00 pm

You must file a departure return when you left Canada, May 7,2011 this is date you entered US.

You have no capital gain in US on property you sold in Canada unless there was a tremendous change in value from May to July 11. When you came to US that becomes the new cost( the FMW) of the home for US purposes that is what you use to calculate cap gain in the US. The new home purchase has no effect at all on the CND sale. All this is by treaty election.

Sale of rental property same the cost is the FMW day you became US resident so any gain over this is taxable, and any tax paid to Canada can be claimed as credit on US side.

You can claim Fed and Qc taxpaid for tax credit but only if that income was taxed also in US.

There are numerous posts on this subject in this forum so look through all the posts to get more info.

zhangym · Post by **zhangym** » Sat Mar 24, 2012 9:09 pm

Thanks a lot JGCA. I will go through the posts and try to find the information I need. What about the departure return? I didn't file it. What should I do now? I didn't know how long I was leaving until recently. What would be the result for me not filing the departure return and stay in US for a long time?

JGCA · Post by **JGCA** » Sun Mar 25, 2012 9:54 am

you left May 2011, so when you file your CND 2011 tax return you put the departure date on it that's a regular tax return T1 filed as a resident of teh province you were in 2011 but with a departure date, your tax software will do it easily for you. If by any cahnce you already filed a regular CND 2011 return just make an AMENDMENT if not file it properly now.

zhangym · Post by **zhangym** » Sun Mar 25, 2012 9:18 pm

Thanks a lot, JGCA.

zhangym · Post by **zhangym** » Tue Mar 27, 2012 12:18 am

I am now trying to do my tax and just realized that I forgot to ask two questions.
1. For my principal residence sold in August, since by treaty, I don't have to pay any capital gain. Do I still need to report it to IRS? Which form should I use if I need to report it?
2. For the rental property I sold in July, I actually lived in it for >2 years in the past 5 years as principal residence, but when I sold it, it was rental property. Does it qualify the property gain exemption for main home?