renting house to family
Moderator: Mark T Serbinski CA CPA
renting house to family
I was reading a previous post about cutting ties with Canada and I would like to know if the same rules would apply in my situation. The previous post says that if somebody owns a house in Canada, then move to the US, he/she must sell or rent that house to cut ties. If he/she decides to rent, it must be to a non-family member and at fair market value. Now here's my situation. I left Canada 8 years ago to live in the US. I didn't own a house at the time. Two years ago I purchased a house in Montreal as an investment. Here is the twist ! I rent this house to my brother, under the fair market value ! Did I just create a tie with Canada ?
There is a *slight* difference between maintaining a residential tie and creating one.
Had you left canada and rented out your house to your brother (fair value or not by the way) this would be a sufficient tie to make you a resident (or, a deemed non-resident if living in a treaty country).
If you are already a non-resident, establishing the tie you describe would not ordianrily make you a resident, unless you soon thereafter made this home your residence, thus establishing that you intended, from the day you bought the home, to move to Canada.
By the way, it can be viewed that renting out below market to your brother disqualifies the home as an investment, in temrs of writing off expenses etc.
<i>nelsona non grata... and non pro</i>
Had you left canada and rented out your house to your brother (fair value or not by the way) this would be a sufficient tie to make you a resident (or, a deemed non-resident if living in a treaty country).
If you are already a non-resident, establishing the tie you describe would not ordianrily make you a resident, unless you soon thereafter made this home your residence, thus establishing that you intended, from the day you bought the home, to move to Canada.
By the way, it can be viewed that renting out below market to your brother disqualifies the home as an investment, in temrs of writing off expenses etc.
<i>nelsona non grata... and non pro</i>