US/Canadian Seasonal Residence in Ontario

[butlertl]

My wife (Dual Citizen Canada/US) and I (US citizen) have our primary residence in Virginia. We are purchasing a seasonal residence in Ontario this summer and then next year will sell our house in Virginia and move on to our trawler boat for winters. So in the future winter in the US on boat and summer in Ontario at seasonal residence. We know that my wife can stay in Ontario year round but I can only stay 6 months. We have been advised that the IRS will accept our boat as our primary residence for tax purposes. We would like to know the tax implications of buying a place in Canada. We know when we sell the Canadian government will collect 33% of capital gain as withholding tax, that 75% of capital gain is taxable at 17% to 29%, that withholding tax is credited against money owed, capital gain must be reported to IRS and we must file a canadian tax return the year we sell. Is there anything else we need to know before buying?

[nelsona]

Your figures are wrong on the Cdn taxation. 50% of the gain will be taxable in canada, at graduated rate beginning at 0% to ~40%, which will be calculated on a non-resident tax return. And the withholding would be 25% at most of the gain.


The thing you must be careful about is that neither of you exceeding 183 days in canada in any calendar year, otherwise you become liable for Cdn tax on ALL your income.

And when you do sell, you need to make sure BEFOREHAND that you have notified CRA; that is currently done with form T2062.