Resident status

This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.

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canadian
Posts: 19
Joined: Mon Apr 11, 2005 11:33 pm

Resident status

Post by canadian »

Hi there,
First of all I would just like to thank everybody for this forum. I have found here a lot of answers to a lot of questions I had. But I still have one. Here is the situation:
I moved to USA in November 2004. I'm Canadian citizen on TN visa. My wife moved to USA January 2005. We have a house in Canada which we trying to rent out from January 2005(lease on 1 year). Also we have a car, driving licenses, credit cards and bank accounts still in Canada. In USA we have 6-month lease in apartment, medical insurances, credit cards and bank accounts. After July we are going to change my status from TN to H1B, and later apply on Green Card. We are going to buy the car in USA, and change our driving licenses.
Based on this situation we trying to determine what our resident status will be for USA/Canada for 2005. I called to CRA with this question, but they have only one answer: they want me to fill in NR73.
Could you give me your opinion on which status I will have to fill in my USA/Canada tax return for 2005?
Will I be considered as a resident of Canada or USA? Or they give me the dual status?

Thanks
CheapScotsman
Posts: 15
Joined: Tue Apr 12, 2005 8:29 pm

Post by CheapScotsman »

To the best of my knowledge (hopefully more than just enough to be dangerous) ...

The canadian system for determining non-residency is gray. the more you look non-resident, the better your changes of being deemed non-resident ... but you still have a house (not rented at arms length), car, drivers license and credit cards that are Canadian based. You are not looking very non-resident for 2005 (if you still have these in April). Get rid of them / get the house rented at arms length (sell to your parents, siblings, etc). You can run through the NR73 yourself and see how you "feel" about what you have ticked off.

The US system is much more cut and dry. You can find the substantial presence test in Pub 519. If you meet the requirements, you are a resident.

If you are refering to dual-status in US termns, then you can determine that using the substantial presence test / non-resident alien info info Pub 519. If you mean dual-status as in resident of both countries for tax purposes then you will be as long as you are resident in Canada and earning income out the states (having to file a 1040 or 1040NR).

Scott
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