Property Valuation

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TaxGuruz
Posts: 4
Joined: Sat Mar 21, 2020 6:19 pm

Property Valuation

Post by TaxGuruz »

Hello,

If ceasing residency in Canada, but didnt meet the SPT test in US, so Non resident in US.(1040NR)

Have rental property - do we have to file election with 1040NR return , saying the value of the property is now increased to the the FMV?
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Property Valuation

Post by nelsona »

was this rental previously your home when you left Canada?
Despite not meeting SPT, you still have a departure date from canada.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
TaxGuruz
Posts: 4
Joined: Sat Mar 21, 2020 6:19 pm

Re: Property Valuation

Post by TaxGuruz »

There is two rental properties. One was the home before leaving, and one was rented generally.

Yup - put the date when they departed Canada.

Any idea re: do I have to fill in an election with the 1040NR to bump up the cost values to FMV on departure date I guess for both of them? Or is this unnecessary.
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Property Valuation

Post by nelsona »

One should obtain an FMV for both properties based on departure date.

There are in fact TWO elections to be made on the continuously rented property, since ,like the former home. neither is automatically subject to deemed disposition when leaving Canada.

First, it is in Canada that one can choose to have deemed disposed the continuously rented property. Then, Rev Proc 10-19 can be invoked on that property along with any other deemed disposed investments. The deemed bases will be used, in future, when selling those investments. One can post security with CRA to avoid paying the deemed tax until sold.

The former home is protected by the treaty Article XIII(6) so any future gains will be based on the FMV at departure, but there is no need to file anything in either country until the sale of that property.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
Unikkanto
Posts: 1
Joined: Fri Jun 17, 2022 5:38 am

Re: Property Valuation

Post by Unikkanto »

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Baxteri
Posts: 1
Joined: Thu Feb 16, 2023 8:59 am

Re: Property Valuation

Post by Baxteri »

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