Spend more than 6 months in Canada per year and not become a tax resident?

[taxpayer2000]

Hello

Thank You for taking the time to read my post.

I became a US Citizen Canadian PR as a child through my mother. I went to college in Canada and was living here for a few years. I moved back to USA after getting a job in the US. Although I have not renewed my PR card, I am still a PR.

I want to spend enough time in Canada to renew my PR card which is 730 days within the past 5 years and then depending on tax consequences spend 1095 days within the past 5 years to apply for Canadian Citizenship.

I'm studying laws and tax treaties to see if it's possible to stay a US tax resident and still meet the physical presence requirements for Canadian Citizenship.

My understanding is that as long as I spend less than 6 months in a fiscal year in Canada and my income is not from a Canadian company then I do not become a tax resident. Am I correct?

Is there anything in the tax treaty that allows me to stay a US tax resident if I spend more than 6 months in a fiscal year in Canada?

I do have the option to keep my home in US and not rent it out if that helps my situation.

I own real estate and stocks in individual, Roth and 401k accounts which is why I am trying to avoid becoming a Canadian tax resident which could complicate things.

But if I do become a Canadian tax resident as long as I become a non-tax resident in Canada again under 60 months, my existing stocks, real estate would not be cause capital gains tax in Canada due to the 60 month rule? am I correct?


Sorry for all the questions, trying to plan this carefully so I don't run into surprises.

Thank You

[nelsona]

Because of the gtreaty, days spent is NOT a majr criteria for determining tax residency.

As long as you continue have MORE ties in US, including a permanent place to live, you can spend as much time as you want in Canada, including working there.

I will leave it to you to determine if such periods on non-tax residency will satisfy the physical presence requirements to (a) maintaing your Cdn PR card, and/or (b) get Cdn citizenship. The definitions of "days" may be differnct.

And, yes, if you leave Canada withing 6=5 years of establishing Cdn tax residency, then the holdings you entered Canada with will not be subject to demmed disposition tax. But anything acquired while living in Canada will, along with Cdn real estate.

[nelsona]

Just to be clear, your would absolutely need to maintain a full-time primary home in US, and would have to have MINIMAL ties in Canada, perhaps not even having a fived address. No driver's license, no medial coverage, etc) Once you would have a fixed address in Canada (even a rental) CRA could ask you to file a residency determination form where you would need to prove that your "life" is in US.

It may end up being simpler/cheaper to simply move to Canada, and rack up the days needed for citizenship as quickly as possible.

[taxpayer2000]

nelsona wrote:
> Just to be clear, your would absolutely need to maintain a full-time
> primary home in US, and would have to have MINIMAL ties in Canada, perhaps
> not even having a fived address. No driver's license, no medial coverage,
> etc) Once you would have a fixed address in Canada (even a rental) CRA
> could ask you to file a residency determination form where you would need
> to prove that your "life" is in US.
>
> It may end up being simpler/cheaper to simply move to Canada, and rack up
> the days needed for citizenship as quickly as possible.


So as long as I don't rent or own my house that should be ok? Staying with family or friends would not be considered a fixed address right? I would keep my Florida home available at all times and not rent it out.

I don't plan on getting health insurance, a car or a driver's license from Canada.

Depending on if decide to get a job in Canada or work on getting my old online business running I may need a Canadian bank account in order to get paid if I get a job in Canada. Would that be a problem?

There is a high probability that my team would be laid off early 2024, that's when I need to start executing on my plan.

I plan on using the Serbinski firm for assistance.

[nelsona]

As I said, the more you have in canada the more likely you will be considered resident. While financial ties are not as significant as house and dependents, they could add up.

[taxpayer2000]

nelsona wrote:
> As I said, the more you have in canada the more likely you will be
> considered resident. While financial ties are not as significant as house
> and dependents, they could add up.

ok thank you. One last question. Has there been any case law or determination if Airbnb rented on a monthly basis would count as a "permanent home" under the US Canada tax treaty?

[nelsona]

No. That is not a permanent abode, unless you start recieving mail, etc there.

Don't push it.

[veracityaccounting]

Hello there,

Based on the information and discussions I've seen, spending more than 6 months in Canada per year could potentially lead to being considered a tax resident in Canada. As one user mentioned, having financial ties and spending substantial time in Canada might increase the likelihood of being considered a tax resident.

Regarding your question about Airbnb rentals on a monthly basis, there doesn't seem to be any specific case law or determination mentioned in this thread. The determination of whether an Airbnb rental would be considered a "permanent home" under the US-Canada tax treaty would likely depend on various factors, including the nature of your stay, your ties to Canada, and your ties to the US.

If you wish to maintain your US tax residency, it's important to ensure that you have a full-time primary home in the US and minimal ties in Canada. Having a fixed address in Canada, even if it's a rental, could potentially complicate your tax residency status. Also, not obtaining Canadian health insurance, a driver's license, or other significant ties might help support your US tax residency.

As for the 60-month rule, if you become a Canadian tax resident but then leave Canada within 60 months, certain assets like stocks and real estate holdings that were acquired while you were a Canadian tax resident may not be subject to capital gains tax in Canada. However, it's advisable to consult with a tax professional or an accounting firm, such as Serbinski, to get personalized and accurate advice based on your specific situation.

Remember that tax laws and treaties can be complex and subject to change, so seeking professional advice will be crucial in making well-informed decisions regarding your tax residency and citizenship plans.

Best of luck with your planning and endeavors.

I recommend consulting with a <a href="https://veracityaccounting.ca">CPA firm in Toronto</a> for personalized guidance.

[nelsona]

So just to correct was was essentially a repeat of what already was said:

The statement:
"As for the 60-month rule, if you become a Canadian tax resident but then leave Canada within 60 months, certain assets like stocks and real estate holdings that were acquired while you were a Canadian tax resident may not be subject to capital gains tax in Canada."

This is incorrect. It is assets acquired BEFORE becoming Cdn resident that are protected from deemed disposition rules on departure, not assets acquired while Cdn resident.

Btw, It is poor professional form to solicit clientele on a website provided by a competitor.