Tax Resident for both US and Canada?

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cw
Posts: 13
Joined: Sat Dec 01, 2007 1:36 am

Tax Resident for both US and Canada?

Post by cw »

I moved to US in June 2007 on TD visa with my husband(TN). I've been on maternity leave until Nov. We did not file Exit Canada since we wanted to be a tax resident for 2007. We just sold our house in Canada in Nov (it was listed for sale before we left).

1. If we file Exit Canada, could we use Dec 31 as the date for leaving Canada? My concern about the exiting date of June is that I was still collecting EI for maternity leave until Nov. Will existing Canada make me ineligible for maternity EI payments?

2. If we have to use June as the leaving date, is there any impact on the sale of our house in Nov? We had a big loss from the sale.

3. I read one of your answers on this forum about US tax status. You mentioned that if we are filing as Resident Alien, it is better to report the worldwide income for the whole year. Why not from the date that we become resident alien?

Thank you very much in advance.
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

maternity benefits CAN indeed be collected after you leave canada, so I would not worry about that. in fact, they are subject to a flat tax which is probably less than your provincial rate, so you should have told them when you left it was to your advantage.

1. No. You left in June. You have no basis for saying you left on Dec 31. You could argue that you left in nov, but this would only increase your Cdn tax due to including all thate US income from jun to Nov. You should figure your mat income from before and after departure as the first portion will be reported on your return, the second portion will have 25% flat tax paid by check.

2.No. the loss is not reportable in either US or canada.

3. Why not? because filing only as a part-year resident does not allow for filing married jointly, which has a lower tax rate than the 2 of you filing separately. So, you should file jointly, reporting all world income, and using exclusions and foreign tax crediys to give you the lowest US tax. this will not affect anything on your Cdn tax return.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
cw
Posts: 13
Joined: Sat Dec 01, 2007 1:36 am

Post by cw »

Thank you so much. This question has bothered me for a long time. You're the best.
cw
Posts: 13
Joined: Sat Dec 01, 2007 1:36 am

Post by cw »

Hello Nelsona, thanks a lot for your previous reply. I just read on CRA's website about disposing your real estate as a non-resident, and it scared me. (regarding to previous question 2) Seems like we will have a fine if we don't report the sale even if we had a loss.

http://www.cra-arc.gc.ca/E/pbg/tf/t2062/t2062-07e.pdf

I thought that if we had a loss, we don't need to report? Or maybe I read it wrong?

Also, I'm trying to file Departure tax, but there isn't any forms for 2007 on their website. Should I wait until next year?
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

You should be filing this form now. You can argue later that as an emigrant your status was unclear and that now you know that you are non-resident, and not pay penalty.

As for all the other forms, these are listed in the Emigrants guide. Check each one, but I'm quite sure that these are only due with your 2007 return next spring. But they are due on April 30th, so don't delay filing even if you owe no tax.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
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