Trouble determining emigration date for NR73 & Final Can Return

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uscangirl
Posts: 2
Joined: Thu Apr 09, 2020 11:43 am

Trouble determining emigration date for NR73 & Final Can Return

Post by uscangirl »

I’m a dual US/Can citizen, my husband is Canadian Citizen with green card since 2014. We made a gradual move to the US while we established our self employment as musicians over the course of a couple of years. Started spending half the year in each country, gradually down to only 72 days in Canada in 2019. As dual citizen I always filed taxes in both countries so mistakenly believed we needed to continue filing worldwide income to both countries indefinitely, which has resulted in double taxation for our SE income the last couple of years, to both CPP and SS. An accountant I contacted said we should officially emigrate ASAP to stop this double taxation, and use Jan 1 2019 as our exit date.
However when I spoke with CRA they said I need to file NR73 to determine our emigration date. I’m struggling with how to determine this date properly considering we maintained some “ties” that might affect what date we should use. Don’t want to trigger any audits or problems so want to do this properly.
Here are some timeline details:
- Sold our Canadian house in 2015, bought a park model trailer in Ontario and put it on a lot in a seasonal trailer park. This is where we stayed when we came back to Canada during the summer to vacation and do a little work for the few clients we maintained in Canada.
- March 2017 bought a permanent home in Florida. Prior to that we lived in a mobile home on a rented lot in Florida.
- Notified OHIP in March 2017 that we would not spend enough time in Ontario to qualify for OHIP. Received a confirmation letter from OHIP.

Here are the ties we kept in Canada that I am concerned will affect what we should choose as our official emigration/exit date:
-Left a cheap car registered in Ontario to drive when we were there. We finally disposed of the car in Sept 2019 before we came back to Florida.
-Hubby exchanged his Ontario DL for a Florida DL in 2017. However, I kept my Ontario DL along with my Florida DL so I could keep the car registered and insured in Ontario (Florida allows you to keep your Canadian DL if you take the drivers test). I have only recently written to Service Ontario to cancel this DL.
-We had a PO Box for our Canadian address after we sold our house in 2015, in the town near our campground. Closed that PO Box in July 2019 and put my parents address as our Ontario address for bank accounts, CRA etc. as well as for my DL and for hubbys Ontario ID card. I mistakenly thought we needed to maintain a Canadian address for all these things.
-We still have RRSPs and savings, a couple of checking accounts and credit cards in Canada. These accounts used our Canadian address (PO box, then parent’s address) until I officially changed to our US address with the banks and CRA in Feb 2020.
-We continued to file HST reports for our Canadian income and expenses through 2019. I closed our HST account effective Dec 31, 2019
-We have continued to receive Trillium benefits and GST rebates (Trillium stopped in Feb after I changed address). I am guessing this is not a problem since we did declare all our worldwide income and paid taxes to Canada thoughout all those years, so should have been eligible for those things. BUT, does that affect the date we should declare non residency? Will there be a clawback of those benefits if we choose Jan 1/2019"
-Last item is a livestock trailer that I kept registered in Ontario since I only used it to go back and forth. We did import our 2 other Ontario vehicles in 2015 and paid all the import fees and state taxes and registration fees to Florida. However, I did not import the trailer until Feb 2020.

So wondering if the gradual dropping of our "ties" to Canada affects the date we should put on our final tax return and/or if there will be repercussions if we choose the incorrect date.
- Should we put Jan 1, 2019 as the accountant suggested? Pay taxes only on Canadian income.
-Or Sept 2019 when we disposed of the vehicle (and crossed the border again)? Pay taxes on both US & Can SE income up to Sept 2019
-Or Dec 31 when we closed our HST account? Pay taxes to both countries for entire year
-Or Feb 2020 when I finally imported the trailer and notified banks and CRA of US address? Would the bank/CRA notification be considered the official date? This would mean another full year of double taxation for all of 2019, plus another month or so of 2020.
Finally, Filling out of T1161
The only valuables we still have in Canada (other than RRSPs and some cash savings) is our trailer on a rented site in a seasonal campground. Would this be a capital gains item requiring a T1161? If so I am guessing we would split the value between both my husband and myself.
We purchased it in 2015 for $52K (plus HST $6760).The Purchase price included installation onto the site with electrical, water and sewer hook-up, plus some repairs, etc. These items rarely appreciate, so I am guessing that it would probably now fall beneath the $25K reporting if we split the value. However, to be safe, should we report this on a T1161 anyways?
Thank you so much for any guidance on this…..this forum is awesome! I wish I would have discovered it a couple of years ago. Would not have made so many mistakes......
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Trouble determining emigration date for NR73 & Final Can Return

Post by nelsona »

First off, NR73 is never required for YOU to determine departure date, Only file if CRA OFFICIALLY requests (not by telephlunkie).

All the items you mention are MINOR ties, especially considering the US/Canada treaty, by which you were resident of US since 2017. THAT was your departure date. When you spent more time in Florida than Ontario, Ownership is not the criteria. Abode is the criteria. Once you had 2 abodes, the treaty comes into play. When you stopped OHIP, you should have then declared non-residence on your 2017 return (after ALSO stopping GST and any other Cdn benefits).

Any other date you pick is really fictitious, since you cannot really point to any other specific action.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
uscangirl
Posts: 2
Joined: Thu Apr 09, 2020 11:43 am

Re: Trouble determining emigration date for NR73 & Final Can Return

Post by uscangirl »

Thank you so much Nelsona. I so very, very much appreciate your help. I do realize now that I really messed up and we should have declared non residency in 2017 when we stopped OHIP. But since we did not, I am just trying to pick up from here and hoping not to revisit and refile 2 years of returns and open cans of worms. Particularly since we already had our 2018 returns reassessed due to the fact I tried to deduct our IRS SE taxes paid via FTC. CRA decided we actually had MORE CPP owing, plus a penalty. I just paid it to avoid problems. So now just trying to find a point moving forward that has a specific action that could be considered a departure date, and start clean from there.

At this point, I'm thinking that since we were back in Canada for 2 months last year and worked a little bit, I need to look at the actions we took while we were there that would possibly indicate our intent. There is the fact that in July I closed our PO box and changed our Ontario address with Service Ontario for ID card and DL, bank and CRA. At that point we did declare we were still Ontario residents, believing we had to maintain that residency due to the ties we still had. Given those actions I think it might be a mistake to follow accountant's advice file as non resident starting Jan 2019. That would seem contradictory to the actions we later took that year.

So I'm thinking to avoid any problems we should maybe file one last year as Ontario residents for 2019. Then use the date of when I officially closed our GST business account and changed to our US address with both CRA and the bank, which is Feb 2020 ? That we decided at that point that our intent was to no longer have any ties to Canada (and in fact with the coronavirus, we are likely not even going to be able to visit Canada this year). Does that make sense as a logical departure point? And it's definitely an easier tax return to do than splitting 2019 between NR and R.

And I'm concerned since I spoke with someone at CRA who told me I MUST file NR73 to have our non residency date determined, might they have made a note on my account to that effect??? So if I don't file the NR73, might we be flagged?

Thank you again for all your incredibly helpful advice to everyone who comes on this forum trying to wade through the US/CAN tax waters safely.......
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Trouble determining emigration date for NR73 & Final Can Return

Post by nelsona »

Intent is no longer a criteria for residential ties. The treaty and CRA regs clearly make you a non-resident for many years.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
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