Supporting parents in Canada

Coconut · Post by **Coconut** » Wed Jul 06, 2005 12:36 pm

Let's say I will need to finanically support my parents who live in Canada, and I have been living in the US for years and have Green card. Is there anything we can do to maximize the total tax deductions?

nelsona · Post by **nelsona** » Wed Jul 06, 2005 2:06 pm

Your Cdn parents CAN be considered dependants for IRS purposes.

There are strict rules on what percentage of their income you are providing. You can't simply be sending them $50 once in a while.

Review the IRS rules for dependants. They will get you one exemption more per parent (currently $3100 deduction)

They will need ITINs when the time comes.

<i>nelsona non grata... and non pro</i>

Coconut · Post by **Coconut** » Wed Jul 06, 2005 2:34 pm

What about mortgage? I am going to buy a house for them in Canada. Is it a good idea to put my name in the house, of course, in terms of taxs?

nelsona · Post by **nelsona** » Wed Jul 06, 2005 2:46 pm

Buying their house would be an investment, not suport, since it would be yours.

You may have to pay the mortgage, and this would be considered support.

You would also be getting into the realm of giving a GIFT to your parents, which may or may not be taxable under thegift tax laws in US.

<i>nelsona non grata... and non pro</i>