Cap Gain on property in Canada due to change in dollar only
Moderator: Mark T Serbinski CA CPA
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Montreal_us
- Posts: 10
- Joined: Thu Jun 09, 2005 3:33 pm
Cap Gain on property in Canada due to change in dollar only
US citizen living in Canada bought property bought in 2002 for CAN$2,000,000 sold in 2009 for CAN$2,000,000,no cap gain in Canada ,no taxes paid. However as US citizen subject to tax on worldwide income ,In '02 US= .63 in '09 worth .088,resulting on "gain "$500,000US. Would Article 13(4) of US-Canada Treaty work to exempt the gain from being taxable in the US? Or is there any other way to avoid having to pay US$75,000 on money never seen?
No.
Unfortunately for US citizens, XIII(4) -- along with about 90% of the rest of the treaty -- simply doesn't apply.
This is by the so-called "saving clause", Article XXIX(2). This clause allows the US to tax its citizens without regard to the treaty, wherever they live, except for the specific paragraphs listed in XXIX(3). You will note in XXIX(3), the particular paragragh that you would love to avail yourself of is not listed.
Your cost basis and proceeds are calculated exactly as you have described (always in then-current US dollar values), and you report gains and losses.
Unfortunately for US citizens, XIII(4) -- along with about 90% of the rest of the treaty -- simply doesn't apply.
This is by the so-called "saving clause", Article XXIX(2). This clause allows the US to tax its citizens without regard to the treaty, wherever they live, except for the specific paragraphs listed in XXIX(3). You will note in XXIX(3), the particular paragragh that you would love to avail yourself of is not listed.
Your cost basis and proceeds are calculated exactly as you have described (always in then-current US dollar values), and you report gains and losses.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best