Canadian citizen selling home in florida owned less than 1 y

projectpete · Post by **projectpete** » Thu May 17, 2007 9:33 am

Hello,

I am a canadian citizen working on a tn in florida. we bought a home that closed on December 15, 2006. We are looking to sell, I have heard if you sell your house when owned less than a year you have to pay hefty taxes, is this true? Does anyone know the percentage?

The reason we are thinking of selling is we may move back to canada.

projectpete · Post by **projectpete** » Thu May 17, 2007 9:34 am

also, if we move back to canada do we have to claim it on our canadian taxes as foreign property owned, i am filed as a non-resident in canada

nelsona · Post by **nelsona** » Thu May 17, 2007 11:00 am

Since you did not own it and live in it for 2 years, it is not eligible for the $500,000 capital gains exclusion. You may however meet other criteria (such as moving for work) that maight get you some or all of the gains as non-taxable.

As to canada, it will not be taxable, either because you sell it before returning, or because you sell it soon after leaving US, and the post-arrival gains (which would be minimal anyways) would be excluded by the principal residence exclusion.

If you hold the property after you return, you may have to report it as foreign property, although I believe that foreign real estate for personal use is not reported as such.

Any income you make from it would be reportable of course, but that doesn't seem to be what you are asking.

projectpete · Post by **projectpete** » Thu May 17, 2007 11:05 am

so for example if i sell it for a $50,000 profit before returning to canada, i will not need to claim it in canada?

projectpete · Post by **projectpete** » Thu May 17, 2007 11:07 am

sorry also, do you know what the percentage tax the IRS charges against capital gains if selling a house owned less than a year.

i heard if sold within first year they charge 40% between 1st and 2nd year they charge 14% and after two years none

nelsona · Post by **nelsona** » Thu May 17, 2007 12:14 pm

There are various rates of long term/short-term and after two-years the rate drops.

If however, you are non-resident of US before you sell, the rates could change.

Any non-Cdn income you make while a non-resident of canada is never reported to CRA, just like your US salary, any US interst you made, etc.