Deemed Resident for One Year

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dodyp
Posts: 4
Joined: Fri Feb 19, 2021 3:44 pm

Deemed Resident for One Year

Post by dodyp »

Hello Tax Experts,

I was a non-resident of Canada for 2019. In previous years I was a factual resident.

For various reasons, I think I am a deemed resident of Canada in 2020 after spending about 200 days working and living in-country in total.

In 2021, I expect to go back to being a non-resident. Should I be filling out a “deemed disposition” of assets acquired and disposed of during 2020? Or does that not apply to deemed residents?
nelsona
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Re: Deemed Resident for One Year

Post by nelsona »

What country were you resident of. Tax residency will be based on the residency clause of that treaty (if any), NOT the number of days you spent in Canada. And if you were in canada due to COVID, then even the taxation of your income in Canada will be limited.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D
dodyp
Posts: 4
Joined: Fri Feb 19, 2021 3:44 pm

Re: Deemed Resident for One Year

Post by dodyp »

I was a resident of the US but was working in Bangladesh for the previous year, and claim the FEIE. I came to Canada primarily for family reasons.
nelsona
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Re: Deemed Resident for One Year

Post by nelsona »

So, if you still have the same residency ties in US that you had when you went to Bangladesh (otherwise you would not have had to file a US 1040 tax return), then you should still be able to claim US residency for 2020.

But if you have no home in US, then you are really a factual resisnt of Canada ( a newcomer, technically).

I would need more details.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D
dodyp
Posts: 4
Joined: Fri Feb 19, 2021 3:44 pm

Re: Deemed Resident for One Year

Post by dodyp »

Right. The US side is by citizenship only and my residential ties are in Bangladesh I guess.

But on my original question, would a deemed resident (sojourner) need to make a deemed disposition after just one tax year?
nelsona
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Location: Nowhere, man

Re: Deemed Resident for One Year

Post by nelsona »

I would say no, you only report actual revenue.

However, as I keep pointing out you cannot be a sojourner if you reside in a country with a tax treaty. Bangladesh has such treaty.

So you can only be:

a factual resident of canada (because of ties in Canada and you do NOT meet the residency of bangladesh rules), and will remain so until you leave.
a deemed non-resident (because despite Cdn ties, you do meet the definition of a residennt of Bangladesh), which is the same as non-resident.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D
dodyp
Posts: 4
Joined: Fri Feb 19, 2021 3:44 pm

Re: Deemed Resident for One Year

Post by dodyp »

Ahh... I see. So the tax treaty will effectively make me a resident of one or the other country.
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Deemed Resident for One Year

Post by nelsona »

Correct. If you meet the residency rules of both countries, then by going through the tie-breakers in the Residecy article, it will come down on one side or the other.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D
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