US resident moving to Canada - Matrimonial home
Moderator: Mark T Serbinski CA CPA
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US resident moving to Canada - Matrimonial home
Hi there,
My wife and I are "dual" citizens (Canadian + USA) and presently US residents. We are planning to move back to Canada. We have a "matrimonial" house in the USA and no other property (in the USA nor Canada).
Questions:
1) If we buy a house in Canada before becoming Canadian residents, can we declare this Canadian house as a "matrimonial" house?
2) if yes to #1: Is there a set period for us to become Canadian Residents after we purchase a house in Canada?
3) Can we simultaneously have a "matrimonial" house in Canada and the USA?
4) If yes to #3: Is there a time limit, after we become Canadian residents, to sell our USA house without having to pay capital gain on the USA house?
I am looking forward to your answers.
My wife and I are "dual" citizens (Canadian + USA) and presently US residents. We are planning to move back to Canada. We have a "matrimonial" house in the USA and no other property (in the USA nor Canada).
Questions:
1) If we buy a house in Canada before becoming Canadian residents, can we declare this Canadian house as a "matrimonial" house?
2) if yes to #1: Is there a set period for us to become Canadian Residents after we purchase a house in Canada?
3) Can we simultaneously have a "matrimonial" house in Canada and the USA?
4) If yes to #3: Is there a time limit, after we become Canadian residents, to sell our USA house without having to pay capital gain on the USA house?
I am looking forward to your answers.
Re: US resident moving to Canada - Matrimonial home
Not sure what you mena by matrimonial home. Do you mean principal residence.
1. You can haver a home in Canada and still be a CDn-non-resident, if your ties in US are still stronger than in Canada. Typically, you will only be CDn resident when you actually move in. You cannot have a principal residence in Canada unless you are a CDn tax resident; it will remain the one in US.
2. No
3. No. Once you move to Canada, you will have to choose one or the other at the time you sell one. You CAN have the US home as a principal residence, even once you move to Canada. Since you would barely be taxable on the US home, most would simply nt declare any period of time in Canada as their principal residence (unless you are only renting in Canada).
4. 3 years before you would need to pay US tax. Any Cdn tax would be based the increase in value from the day you move to Canada until the day you sell, regardless of the time. So get good market evaluation at the time you leave US.
1. You can haver a home in Canada and still be a CDn-non-resident, if your ties in US are still stronger than in Canada. Typically, you will only be CDn resident when you actually move in. You cannot have a principal residence in Canada unless you are a CDn tax resident; it will remain the one in US.
2. No
3. No. Once you move to Canada, you will have to choose one or the other at the time you sell one. You CAN have the US home as a principal residence, even once you move to Canada. Since you would barely be taxable on the US home, most would simply nt declare any period of time in Canada as their principal residence (unless you are only renting in Canada).
4. 3 years before you would need to pay US tax. Any Cdn tax would be based the increase in value from the day you move to Canada until the day you sell, regardless of the time. So get good market evaluation at the time you leave US.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
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Re: US resident moving to Canada - Matrimonial home
Thanks,
This is really helpful.
This is really helpful.
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Re: US resident moving to Canada - Matrimonial home
I have a few other question.
From what I understand, the year one becomes a resident of Canada (moving from the USA), the entire year of this transition is taxable in the USA, and the subsequent years would be taxable in Canada. I am correct? (Even though, one needs to "declare" him/herself as Canadian Resident the day of the border crossing.)
Is it possible to temporarily keep the USA Health Insurance/Medicare active while waiting for the 3-6 months delays in being covered by the Provincial Health Care system? If yes, would it be necessary to maintain an address (home or apartment) in the USA during this waiting period?
Sincerely,
From what I understand, the year one becomes a resident of Canada (moving from the USA), the entire year of this transition is taxable in the USA, and the subsequent years would be taxable in Canada. I am correct? (Even though, one needs to "declare" him/herself as Canadian Resident the day of the border crossing.)
Is it possible to temporarily keep the USA Health Insurance/Medicare active while waiting for the 3-6 months delays in being covered by the Provincial Health Care system? If yes, would it be necessary to maintain an address (home or apartment) in the USA during this waiting period?
Sincerely,
Re: US resident moving to Canada - Matrimonial home
You are a US citizen, so you will always be taxable in US regardless of where you live.
You will begin being taxable in Canada when you become a tax resident.
You will be filing double tax returns from the first year you arrive in Canada onwards. A series of tax credits will mitigate paying double tax however.
Whether you can keep your healthcare or not depends on the US plan you have. Medicare does not cover foreign medical costs. If you have a private plan, check with them on foreign coverage.
Not all provinces have waiting periods, but typically it is 3 months,
You will begin being taxable in Canada when you become a tax resident.
You will be filing double tax returns from the first year you arrive in Canada onwards. A series of tax credits will mitigate paying double tax however.
Whether you can keep your healthcare or not depends on the US plan you have. Medicare does not cover foreign medical costs. If you have a private plan, check with them on foreign coverage.
Not all provinces have waiting periods, but typically it is 3 months,
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
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Re: US resident moving to Canada - Matrimonial home
Thank you again.
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Re: US resident moving to Canada - Matrimonial home
I just reread the answer….
So…. When one becomes a Tax Resident of Canada - the year of becoming a Resident or the following year?
Sincerely,
So…. When one becomes a Tax Resident of Canada - the year of becoming a Resident or the following year?
Sincerely,
Re: US resident moving to Canada - Matrimonial home
The instant you become a resident, you will file for that year. A newcomer return.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
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Re: US resident moving to Canada - Matrimonial home
Sorry, my Question was not clear. I was just wondering on when the Tax brackets and rates would be change form the US to the Canadian calculations: the year of returning to Canada?
Re: US resident moving to Canada - Matrimonial home
Please reread my answers. There is no change over. You will always be subject to BOTH tax systems once you move to Canada.
Income earned from either country will be reported on BOTH your US and Cdn tax returns, beginning the day you move to Canada.
I can't make it any clearer.
Income earned from either country will be reported on BOTH your US and Cdn tax returns, beginning the day you move to Canada.
I can't make it any clearer.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
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