We have someone interested in possibly doing a rent-to-own deal with our house in Canada. As you know, we will be non-resident soon.
How much complication would this add to our reporting to CRA and IRS? Any other downsides to be aware of?
rent to own
Moderator: Mark T Serbinski CA CPA
Rent to own doesn't mean anything special. Its rent. You will have rental income to report to Canada, US and wherever you live. your rent tax will be withheld monthly to CRA, as has been covered here many times.
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Well, a lot depends on the contract you have. Technically, each "rent" is apayemnt on the house, which would be cap gains.
I would steer clear of this as a non-resident owner/seller. Sell or rent.
I would steer clear of this as a non-resident owner/seller. Sell or rent.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
The reason is that since this was your principal residence, you will not any cap gains tax until after one year renting, so you will have withholding for nothing. Same in US, except that is for three years. You are getting into a very complex tax and accounting situation.
Find a worthy buyer. rent to own has no advantages to the seller in any situation, much less a non-resident.
Find a worthy buyer. rent to own has no advantages to the seller in any situation, much less a non-resident.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing