Complications with CDN and US Returns - Need Advice

[Pandas]

Hello,

This forum has helped me understand how to finally file Canadian and US tax returns properly. Special thanks to Nelsona for sharing the knowledge. I may be overthinking my situation and would like anyone's advice on what I should do.

Scenario:
- Bought a new construction home in Canada as our principal residence beginning of 2018.
- I got a job in the US. Me and my wife (no kids) moved to the US July 2, 2018. Our home was still being constructed during the move. We didn't take possession of the home until July 29 (parents took possession on our behalf).
- Visited Canada from August 2018 to Sept 2018 and December 2018 to January 2019.
- Initially wanted to keep our home vacant, but later decided to rent it out. Started renting out or home on November 2018.

How we filed our tax return for 2018:
- Since we didn't meet the SPT test in the US for 2018, I filed my tax return as a non-resident using 1040NR with only my US income. My wife didn't work in the US so she didn't file anything.
- Filed our 2018 Canadian tax return as RESIDENTS for the WHOLE year (I didn't add a departure date). Included Canadian income from Jan 2018-July 2018, US income from July 2018-Dec 2018, and CDN Rental income for Nov 2018-Dec 2018.

Now, from reading the forum, I know what I did is incorrect. What I plan to do is amend my CDN 2018 return to add a departure date of July 2, 2018. Not include the US income. File the rental income under section 216. File T1161 to declare our house.
1. Would this be the proper way to correct my 2018 return or am I missing something else?

2. My concern is that since we didnt technically have the house on July 2, 2018 since we took possession on July 29, 2018, I'm not even sure if we should even file the T1161. I'm also thinking that since we we're deemed non-residents on July 2, did we technically buy house as non-residents? Are there any tax implications on this? I've read somewhere that there's a 15% tax on non-residents buying a house in Canada.

3. Am I still allowed to file T1161 for our house even though we didn't take possession until later? Will I still be penalized for filing late? Do I even have to file this? Isn't the house excempted?

4. Are the visits to Canada (for leisure) makes us CDN residents? I'm asking since we were in Canada on Dec 31, 2018.

For the 2019 tax year, I plan to file as a non-resident in Canada to file the rental income under section 216. I'm also thinking to keep the 2018 tax filing as is and do a departure return for 2019. Then file as a US resident including US income, the rental income from Canada and claim foreign tax credit from the taxes paid in Canada, and the FBAR. We don't have property that falls under FACTA so we wont be filing that.Still visited Canada and was also in Canada on December 31, 2019.
I did receive a final paycheck from my previous canadian company on January 2019 for the remaining vacation pay worth $75. Just waiting on the T4.
5. How do I exactly file this amount?

Any advice will be greatly appreciated.

Thank you.

[nelsona]

1. Your revised plan would have been the correct one.
2/3. You list the property you had on departure date.
4. No. yu became non-residents when you moved. Period. You did not meet SPT so do not have to file 1040 for 2018, so your 1040NR filing is fine.

You left in 2018, so should fix 2018. 2019 was not your departure year.

3. The wages for 2019 are reported on a 2019 non-resident return, and exclude the income on old line 256. If you had any tax withheld it will be refunded. You need to include the wages on your 1040.

[Pandas]

Thank you nelsona for your help!

Would you happen to know what I should do with my house in terms of declaration to US or Canada? Any tax implications based on our situation? Should I still list the property on T1161 even though it wasn't fully built yet during our departure date?

Which form or tax package would I need for the non-resident tax return? Is it 5013-R? What do you mean by excluding the income on old line 256? I believe there was no tax withheld on the income. The only deductions were CPP, EI, and CCWIPP-EE.

Thanks again.

[nelsona]

did you own the property on your departure date? Decide based on that.