Canadian working in US, wife owns real estate in Canada

[gerrydesj]

I left Canada in May 2007 to work in the US on a TN visa (I am now on a H1-B). I was single at the time and did not own real estate property. I severed all my ties to Canada shortly after I left in 2007. I closed all bank accounts, cancelled credit cards, cancelled my provincial health insurance card, got a U.S. driver's license, closed out my RRSP account and paid the 25% non-resident tax on it. I wanted the CRA to consider me a non-resident from the date I left Canada since income taxes are much lower in the U.S. for a certain income level.

I got married in August 2008 to a Canadian wife. She moved down to the U.S. with me after the wedding. Her status does not allow her to work (she's on a dependant visa) but she co-owns a duplex (two dwelling house) with her brother back in Canada. Her brother and parents occupy one of the dwelling (that is where she lived before we got married) while the other is rented out to a tenant so she earns a small income there.

Questions:

1-The house was purchased in 2001, way before we got married but I am concerned that the Canadian Revenu Agency might use this to claim that we still have ties to Canada and try to tax my U.S. income even though it is not my house. Am I right to be worried? If yes, what are the options, should she sell her half to her brother to avoid any issues? Should we file separately in the U.S. so I don't have to report the rental income from the property on my return?


2-An other of my concern is that my accountant did not ask me to file an NR-73 form when I left Canada in 2007. He just stated on the first page of the T1 form that I had ceased to be a resident of Canada in 2007 on May 2nd. Is the filing of form NR-73 mandatory to be considered non resident or is stating so on your tax return enough?

Thanks for your help.

G.

[nelsona]

You have no concerns. You were non-resident, and now so is your wife. The property is a minor tie insufficient to make her resident in canada.

That said, she and her brother need to make sure that her proper filing and reporting is done for her share as a non-resident.