Foreign properties in the US

[Mimo]

Hi,
Sorry not a lot of knowledge here hence my questions.
I have foreign properties (rental home) in the US. I’m Canadian resident, no income from Canada. Moved here in 2020
First year came to Canada, my accountant claimed part year rental income but didn’t depreciate the properties. We are in Ontario
For this year, full year rentals, I’m wondering whether to depreciate or not? Depreciation is mandatory in the US but not in Canada. What are the impacts of depreciating or not? How to calculate depreciation amount? I read lots of different opinions online sometimes recommending depreciating and recapture at higher rate, and sometimes not. What’s the best scenario?

We’re planning to convert one of the rentals into a primary residence in the next few years. How would depreciating or not impact this decision.

Thanks in advance for your input

[nelsona]

You would only depreciate in Canada if you are in the situation where you have little or no US tax to pay (because of deprecating) but do have Cdn tax to pay, without depreciating in Canada. You are then having foreign income with no foreign tax to write off on it.

Once you use Cdn depreciation, you cannot defer taxation of the current gains if you change the use of the property from rental to primary residence. But I would not worry about change of use rules, since if you make a US property your primary residence, that will mean having left Canada, so you will have deemed disposition to pay at that time.

[Carasad]

A good answer, nelsona, thank you. I am an absolute novice to the laws regarding foreign properties in Canada and the US. I live in Harlow, the UK, and the local laws are simpler than North America. Or maybe I am just used to them. If I have any questions there, I just go to Mortgage Advisor Essex (https://Essexmoneyman.com) and ask them what to do. They always give great answers about the problem and do not charge much for their service.
Can you suggest to me some reliable consulting companies in the US and Canada? I would appreciate that very much because it would save me a lot of money and time.