TN visa with property in Canada - Capital Gain Tax

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jimyi
Posts: 2
Joined: Wed Mar 13, 2019 10:54 pm

TN visa with property in Canada - Capital Gain Tax

Post by jimyi »

Hi,

I'm moving to US in this April for a new job on TN visa. I'm deciding if I should sell my primary resident condo property now or rent out.

if sell right now, then no tax consequence.
if rent, and sell later, with below timeline:
- Dec 2015 - Bought Primary resident condo property in Canada
- Apr 2019 - Move to US on TN visa and rent out at the same time (Fair Market value of the property $500K)
- Apr 2020 - Sell my condo (Fair Value of the property let's say $530K)

1. Other than paying tax on the rental income, do I still need to pay capital gain on the 30k portion?
2. My understanding is that if the condo is still counted as my primary residence at the time of sell, I get exemption of capital gain tax. Is that right?
3. Based on NR 73, I will have tie in Canada in Apr 2020 (Canadian bank account, driver licence, health card). Is it sufficient to prove that the condo is my primary residence?
4. My real estate agent mentioned that I need to have an appraisal on my property now. Is it necessary if I can get exemption of capital gain tax?

Thanks,
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: TN visa with property in Canada - Capital Gain Tax

Post by nelsona »

1. For homes that once were your principal residence (PE) you get one year tacked on after departure to sell, without incurring any taxable cap gains. You get three years before the property sale becomes taxable in US.
2. See 1. A non-resident, which you will be in April, cannot have a PE in Canada.
3. See 2. Your ties are not sufficient to make you resident.
4. You agent is very wise. If you do not get an appraisal when you leave, you will not be able to segregate the pre-departure and post-departure gains, and your tax (say, you sell in 2 years or 4 years), will be based on a portion of the entire gain, rather than just the post-departure gains, which may be less.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
jimyi
Posts: 2
Joined: Wed Mar 13, 2019 10:54 pm

Re: TN visa with property in Canada - Capital Gain Tax

Post by jimyi »

Thanks nelsona for your response.

so if I understand correctly, as long as I sell my condo within one year of moving to US (Apr 2020), I will not pay any tax of capital gain. is that correct?
Does that change if say I return back to Canada in 2021 and sell my condo at that time?
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: TN visa with property in Canada - Capital Gain Tax

Post by nelsona »

Of course it changes.

You will have a year's worth of cap gains to pay. Your period of being tax-free ends in April 2020. From that date forward, you will be subject to some cap gains. The longer after that, the more % of your total gain (since 2015) becomes taxable:
April 2020: 0%
April 2021: 18%
April 2022: 31%
April 2023: 40% and US taxation.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
ruzehecuq
Posts: 1
Joined: Wed Feb 02, 2022 8:01 am

Re: TN visa with property in Canada - Capital Gain Tax

Post by ruzehecuq »

TN visa is used to make report on this day without getting known about the importance of this day that was difficult for me. I have to get this possible so I took help from this was the company of https://www.resumewritingservices.org/ that work in this city since long.
amin3570
Posts: 1
Joined: Fri Jun 24, 2022 1:33 pm

Re: TN visa with property in Canada - Capital Gain Tax

Post by amin3570 »

Hi Nelson, your posts were really informative. what is the rule for capital gain for a sale (in July 2022) a couple of months after starting a TN job (April 2022). My family still lives in the house and will do so until July. Would the non-residency tax still apply?
Thanks in advance.
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: TN visa with property in Canada - Capital Gain Tax

Post by nelsona »

Your spouse's [portion is definitely not subject to non-resident rules. You however will need to decide if you have become non-resident or not. if you are still resident you will need to report your US income until that time. Otherwise, your portion of the house proceeds must be treated as if you were non-resident.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
Carasad
Posts: 17
Joined: Tue Dec 07, 2021 6:06 pm

Re: TN visa with property in Canada - Capital Gain Tax

Post by Carasad »

So, what is with the house now? Do you rent it out, or did you decide to sell it?
I also have to move soon, but vice versa, and I have to move from the US to Canada. I decided I would sell my property in Baltimore to Flagship Builders (https://www.flagshipbuilders.net/) to get some good money right from the beginning and be able to make some investments in Canada. I need to say the house was not in good condition at all and this agency offered the best price for it because they are also the builders. Therefore there is no need to pay intermediate fees to anyone.
I hope I will use this money wisely and will not lose it as some other people do.
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