converting rental property to vacation home

MCH · Post by **MCH** » Mon Mar 29, 2010 10:16 am

I am Canadian, holder of green card and residing in the US for 7 years. I Converted my home in Canada to rental property 5 years ago. I am now considering to stop renting my house out and keep it as vacation home for me when I visit Canada in the summer time. Any tax implications to my plans?

nelsona · Post by **nelsona** » Tue Mar 30, 2010 10:35 am

You will stop having to pay rental income tax of course.

But it will still be considered a second property subject to cap gains tax in both countries when sold or reconverted to home.

MCH · Post by **MCH** » Tue Mar 30, 2010 3:38 pm

Thank you for your reply. My plan is to keep it as a vacation home, but in a few years I will make it my principal residence, so when I do that, there will be cap gain tax, right?

nelsona · Post by **nelsona** » Tue Mar 30, 2010 4:32 pm

Yes. In US, you can probablt delay cap gains until sale. In canada you *might* be able to delay it, under more complex rules.

But there will be gains to be paid for the rental years for US, and for non-resident years for canada.

MCH · Post by **MCH** » Tue Mar 30, 2010 5:13 pm

can I used my cap loss on stocks to off set cap gain tax? And what if I don't make profit when I sell it?

nellwills · Post by **nellwills** » Mon Apr 19, 2010 5:08 am

It is better idea to convert Your rental property in to your â€œVacation Homeâ€ .you may have peaceful future over there during summer in Canada .Then you can get benefit in your I.T. also. According to your tax related Quires, I would like to suggest you that The capital gain on the sale will be taxed on the federal return, as well as the state return.Depending on the specific tax laws for Canada, the owner means you may need to report the gain on the sale in Canada and pay your tax as well.

phoenixsansbury · Post by **phoenixsansbury** » Thu May 20, 2010 4:57 am

But if your a CPA in tax and decide to get a law degree, your going to make a killing no matter what law school you go to. Its just that you can now go to court and your a lawyer. People don't care what law school you go to in tax.