Dual Citizen. Canadian Resident. Work in USA without losing Canadian residency?

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xpro6000
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Dual Citizen. Canadian Resident. Work in USA without losing Canadian residency?

Post by xpro6000 » Mon Aug 24, 2020 7:51 pm

Hello

My mother is a dual citizen. USA and Canada. She is currently living in Canada and owns a home in Canada.

If she were to come to USA for a few months, and also to get a temporarily job here, would she lose Canadian residency for tax purposes? My main concern that if she does, then the gains going on her house would be taxable from the moment she starts working in USA?

The house in Canada would still be her only home.

Can she do anything to avoid paying capital gains on her Canadian house if she were to work in the USA?

Ron.Henderson
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Re: Dual Citizen. Canadian Resident. Work in USA without losing Canadian residency?

Post by Ron.Henderson » Mon Aug 24, 2020 9:24 pm

Capital gains on your primary residence are not taxable in Canada, so no worries there.

Ron.Henderson
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Re: Dual Citizen. Canadian Resident. Work in USA without losing Canadian residency?

Post by Ron.Henderson » Mon Aug 24, 2020 11:13 pm

Furthermore, popping down to the US for a few months to work temporarily does not make one non-resident as far as Canadian taxes are concerned.

xpro6000
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Re: Dual Citizen. Canadian Resident. Work in USA without losing Canadian residency?

Post by xpro6000 » Wed Aug 26, 2020 11:30 am

Thank you, that is good to hear.

Is there a certain time she can be out of Canada and working in the US for her to retain the house she owns as her primary residence? Or will it remain her primary residence in the eyes of CRA, IRS as long as it's her only house?

When applying for jobs in US, she can list my address as her residence on her w4 form?

Ron.Henderson
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Re: Dual Citizen. Canadian Resident. Work in USA without losing Canadian residency?

Post by Ron.Henderson » Wed Aug 26, 2020 3:19 pm

If she returns to live in it again before selling it then I can't see primary residence being an issue. You are probably overthinking this.

nelsona
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Re: Dual Citizen. Canadian Resident. Work in USA without losing Canadian residency?

Post by nelsona » Fri Aug 28, 2020 8:40 am

As long as she keeps her ties in US as VERY temporary (does not buy/rent her own place), she will remain Cdm tax resident. She still has to file US tax anyways.7 months without going back would be pushing it.
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Ron.Henderson
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Re: Dual Citizen. Canadian Resident. Work in USA without losing Canadian residency?

Post by Ron.Henderson » Fri Aug 28, 2020 12:28 pm

Even if she somehow lost Canadian tax residency by staying out too long, she would not owe capital gains on any increase the value of her house in Canada, correct?

nelsona
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Re: Dual Citizen. Canadian Resident. Work in USA without losing Canadian residency?

Post by nelsona » Sat Aug 29, 2020 6:53 am

Well, if she became non-resident, then the clock would start ticking and if she sold/died over a year after she left, then there would be some cap gains, but only on a portion based on how many years she lived in the house.

A non-resident of canada cannot claim to have a principal residence in canada for the period they are non-resident. If she lived in the house for 20 years, left Canada and sold/died 2 years later, she would have taxable gains on 1/22 of the total.
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Ron.Henderson
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Re: Dual Citizen. Canadian Resident. Work in USA without losing Canadian residency?

Post by Ron.Henderson » Sun Aug 30, 2020 12:02 am

And if she spent a year outside of Canada (deemed to be non-resident) then returned and sold the house many years later, what happens? Does she go back and figure out some taxable fraction of the capital gains?

The more likely real-world scenario for someone out of the country temporarily (however many months that may be) is to file Canadian returns from the Canadian address without claiming to have ever been non-resident - hassle avoided.

nelsona
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Re: Dual Citizen. Canadian Resident. Work in USA without losing Canadian residency?

Post by nelsona » Sun Aug 30, 2020 7:59 am

Ron
As you probably know, one gets one year of grace when selling a residence that was not always the principal residence (that is why I stipulated "over a year" , so in my example above, if she came back after two years of non-residency (deemed or otherwise), and then sold the house 5 years later, she would owe taxes on 1/27th of the gains.

If she is non-resident for only one year or less, then she would not owe any CDn taxes on the gain.

Points to remember:
She might owe US taxes if the overall gain is more that US$250K.
Staying outside Canada for more than 6-7 months jeopardizes her Provincial healthcare coverage.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

Ron.Henderson
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Re: Dual Citizen. Canadian Resident. Work in USA without losing Canadian residency?

Post by Ron.Henderson » Sun Aug 30, 2020 10:30 am

That makes sense. The OP was worried about someone spending "a few months" in the US.

Provincial health coverage can be an issue.

US tax on the gains is also an issue if one is filing US returns and reporting the sale and all that. The vast majority of dual citizens do not, thankfully.

nelsona
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Re: Dual Citizen. Canadian Resident. Work in USA without losing Canadian residency?

Post by nelsona » Sun Aug 30, 2020 7:47 pm

Well, if she worked in US, she would obviously have to file in US, delinquent US citizen or not.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

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