departure date related questions

[markwu05]

I left Canada last August to start a job in US(TN), my wife(TD) and kids left Canada to Join me in September and our house was sold two weeks later.
Which date should I put as my departure date in my 2005 canadian return, if it is the day our wife left or our house was sold, do I need to report my income in US from my starting date to that date? There is signing bonus, moving reimbursement and salary paid during the peroid.

second question,
I am using quicktax, I find if I put a departure date(even before including foreign income) I will have to pay thousands more tax , and the earlier the departure date, the more tax. And as soon as I put a departure date(even if it is 12/31/05) I lose all my Ontario tax detuction(mainly dependents credit goes from 900/child to zero). I do not think this is fair because the earlier I leave Canada, the less benefits I get from it, why should I pay more tax for leaving early in the year?

Thanks for any help!

[nelsona]

I won't comment on how quicktax handles your departure date, however, in general, you do have to prorate your personal deductions (ie the basic, and spousal ammounts) by the number of days you lived in Canada. Take a look at the "Emigrants' Gide from CRA. Ontario may have its own restrictions as to what can and cannot be claimed by those who leave during the yar.


Remember that for 2005 tax return you are a departing resident of Ontario, so do not use 'non-resident' on the first page, rather use Ontario. This may be a source of your problem. I used Qtax when I left Quebec in 2000 and it calculated everything correctly, and I has 2 separate returns.

As to your departture dat, if your wife's departure and the subsequernt sale of your house were part of a continuous (and short) process to move to US, then you will have no trouble claiming that August was your departure date.

If it had taken 6 months for your wife to 'decide' to move down, waiting for her job to end, or school to finish, etc, this would be a differnt result, but a month or 2 to move is not an issue.

[Mark T Serbinski CA CPA]

Note: Your departure date is the date that your wife finally left Canada, even if it is just two weeks after you did.

In the event that you worked in the U.S. during the period that your wife was still a Canadian resident, then you will have to include that income on your Canadian return, subject to foreign tax credits for taxes paid during that period in the U.S.

[nelsona]

This interpretation is no longer the case. Since the enactment of 250(5) and its subsequent interpretation in IT-221R3, CRA has been taking the position that if the sale of the house was 'in process' at the time that the person left Canada, and that the sale took place 'soon thereafter', they will accept the physical departure date, as the departure date. One is, in effect becoming a deemed non-resident on that day (a deemed non-resident has ties in canada and tax residency in another treaty country). One would then NOT include the foreign income on their Cdn return.

Since the husband in this case would most likely qualify for deemed non-resident status for those few weeks anyway, there is no reason to push the departure date out. The wife of course, would mark her departure date as the date she actually left, but this no longer means that the husband must do so also.


Infact, since 250(5) it is becoming more and more common have couples where one in DNR and the other is resident.

[worryfreeinvestor]

I am using Quicktaxweb (which may be less sophisticated than Quicktax) and there is NOWHERE to put a departure date. In fact, if you put in "BC" as province of residence, it freezes when you get to the mailing address because it only accepts a Canadian mailing address and freaks out at a ZIP code instead of a postal code. It cannot handle departure, as far as I can see. How did you put a departure date in Quicktax?

[markwu05]

I used quicktax standalone and was able to put departure date.