Moving Expenses

syed · Post by **syed** » Tue Mar 20, 2007 10:12 pm

It is disappointing to know that you cannot claim moving expenses in T1 for moving from Canada to the US while keeping residential ties in Canada.
I moved last year but renting out my Condo.
I guess I can claim in my 2007 return if I sell the property this year.

Has anybody gone through this before??
Thanks for the response.

nelsona · Post by **nelsona** » Wed Mar 21, 2007 8:47 am

Moving expenses are not dependant on whether you sell your previous residence or not.

CRA simply does not accept moving expenses for LEAVING canada. Period.

In some cases, it allows students who shuffle back and forth between foreign scholl and Cdn summer jobs to claim moving expenses, but taht is all.

If you moved out of your condo and rened it out, you did NOT keep residential ties anyways. You cannot mererly say that you had residential ties, if you don't haver a residence.

syed · Post by **syed** » Thu Mar 22, 2007 10:52 am

Thanks Nelsona for the response.

I rented out the condo only in May last year and still have my credit card/bank accounts. I thought simply having a property (even the rented one) in Canada will make you a Canadian resident for tax purpose and therefore you need to file T1 and declare world income. I would like to clarify.

nelsona · Post by **nelsona** » Thu Mar 22, 2007 11:01 am

No. NOT renting it out would have made you resident (even then, you could claim US residence).

You left canada the day you packed up and left for work. This is the date you put on your return as your departure date.

syed · Post by **syed** » Thu Mar 22, 2007 1:49 pm

So what would be my classification for filing the taxes in Canada, non-resident?
Here is the situation.
I started working here in the US from July 2005 on TN while my family stayed back in Canada. Moved my family in March 2006.We didn't have any income from Canadian sources until March. We rented out the Condo in April 2006 and cashed out 5K of my RRSP after 10% tax deduction to pay back my RSP loan.
Now do I need to file T1 and report all US income+rental income in Canada?

Thanks and I appreciate the response.

nelsona · Post by **nelsona** » Thu Mar 22, 2007 2:06 pm

You need to file a T1 as a "departing resident". Look at the Emigrant guide on the CRA site. You will put a march departure date, along with reporting your US income before then.

Your RRSP cash out is subject to 25% Cdn flat tax, not to be reported on your T1. Your rental income is subject to 15% tax on the gross rent, which you should already be sending to CRA monthly.

Please read the emigrant guide as well as any other documents it points you to.