Form 8833 for Deemed Deposition of Principal House

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cakik55
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Joined: Wed Mar 30, 2022 10:59 pm

Form 8833 for Deemed Deposition of Principal House

Post by cakik55 »

I just got to know about the treaty on deemed deposition between US and Canada.
I emigrated from Canada to US in 2021 and reported my principal home which is located in US as a deemed deposition property to CRA and designated it as a principal resident on T2091 and Schedule 3 to be exempt capital gain tax.
I know Canada side is done by that, but I am wondering if I also need to submit Form 8833 to IRS to elect to be taxed by US if I will sell it in the future?
nelsona
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Location: Nowhere, man

Re: Form 8833 for Deemed Deposition of Principal House

Post by nelsona »

You did not have to deem dispose your PR in Canada, because there is already a treaty clause in US that protects your former home from taxation on pre-arrival gains without having to trigeer that gain. I would undo that election as you are entitled to an extra year tax free in Canada. you are losing this with the election.

You could use 8833 to formally mention your former home and its FMV.(not that it was deemed disposed), but thios really onlyu needs to be dome at time of sale.

The treaty article is XIII(6)

This is NOT the article that requires you to report your other deemed sold assets using Rev Proc 2010-19
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
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Re: Form 8833 for Deemed Deposition of Principal House

Post by nelsona »

Yokes.
Forget what I said, I thoght your home was in canada.

You do need to use rev proc 2010-19 this year
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
cakik55
Posts: 12
Joined: Wed Mar 30, 2022 10:59 pm

Re: Form 8833 for Deemed Deposition of Principal House

Post by cakik55 »

Thank you for your reply, nelsona.

https://www.irs.gov/pub/irs-drop/rp-10-19.pdf

I am reading rev proc 2010-19 and still need your advice, please.

My husband (US citizen) and I bought our principle house in US in 2020. I moved from Canada to US in 2021. I filed my final Canadian tax return for 2021, including T1161, 1243 (deemed deposition of the house) and Schedule 3 and T2106 to designate as a principle house to get exemption of capital gain tax on this deemed deposition.

Since I emigrated from Canada, I thought my tax obligation is done by submitting those forms above. Also, our house is located in US, so I assumed only US, not Canada, will be automatically able to tax on the capital gain if we sell it in the future. (We are not planning to do so any time soon though).
So do I still make election using rev proc 2010-19 to be taxed by US only? Do I still submit Form 8833?
I am so confused:(
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Form 8833 for Deemed Deposition of Principal House

Post by nelsona »

As I said, disregard my post.

Your Cdn filing was correct. rev proc 2010-19 doesn't really apply to you because you had no tax to pay in Canada on that deemed disposition, so there is no benefit in applying it on that property, since you won;t be taxed in US either.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
cakik55
Posts: 12
Joined: Wed Mar 30, 2022 10:59 pm

Re: Form 8833 for Deemed Deposition of Principal House

Post by cakik55 »

Thank you so much, nelsona! You are always helpful!!
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