I’m a U.S. citizen married to a Canadian. We own a home in Canada (for 20 years). In July 2023, I reestablsihed my U.S. residency and we are waiting for husband’s green card at which time he will join me in US. CRA has accepted my status as an emigrant and I paid income tax up to date of departure from Canada. No problems.
However, we are getting ready to sell our Cdn home and I realized my accountant didn’t file a T1161 in 2023 claiming the home. His response is that this wasn’t necessary as it’s a joint asset, husband is still a Cdn resident using home as primary residence, and home is not a taxable asset.
I’m not convinced this is the case and with a $25 per day late filing penalty, I’m freaking out. I’m self-employed so I don’t need to file taxes until June 15 — should I file a T1161 now and take what will be a substantial ( but less than $2500 max) penalty? Or is my accountant correct that I don’t need to file due to circumstances?
T1161 Spouse still using primary residence
Moderator: Mark T Serbinski CA CPA
Re: T1161 Spouse still using primary residence
Your half of the house should have been reported on 1161. Much the same way when you sell, your half has to be treated as being sold by a non-resident.
If you submitted a T1161 for other property you owned, you might be in the clear by sending an amended form, since the penalty states that it is if you DIDN'T file.
If you submitted a T1161 for other property you owned, you might be in the clear by sending an amended form, since the penalty states that it is if you DIDN'T file.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Re: T1161 Spouse still using primary residence
Thanks for responding. No, I have nothing else to report so have not filed the T1162 form. So much for my cross-border accountant’s advice.
I don’t suppose CRA would waive late filing penalty if I have proof of bad advice? What a mess this accountant created for me.
Am I correct that because I’m self-employed my deadline for filing the T1161 was June 15, same as my income tax? That at least cuts this penalty down if I file asap.
I don’t suppose CRA would waive late filing penalty if I have proof of bad advice? What a mess this accountant created for me.
Am I correct that because I’m self-employed my deadline for filing the T1161 was June 15, same as my income tax? That at least cuts this penalty down if I file asap.
Re: T1161 Spouse still using primary residence
Probably. You have no car?
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Re: T1161 Spouse still using primary residence
No car worth more than $10000. I bought a car here in the US but it is registered here and has never left the state.
When you say “probably” is that an answer to my penalty only going back to June 15? Or that I might be able to get it waived due to bad advice? My accountant is still saying it’s not a problem that I didn’t file a T1161 due to husband living in home currently. He has not provided any documentation to back this up.
Thank you for the replies.
When you say “probably” is that an answer to my penalty only going back to June 15? Or that I might be able to get it waived due to bad advice? My accountant is still saying it’s not a problem that I didn’t file a T1161 due to husband living in home currently. He has not provided any documentation to back this up.
Thank you for the replies.
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- Joined: Thu Apr 11, 2024 5:22 am
Re: T1161 Spouse still using primary residence
cathyn35 wrote:
> No car worth more than $10000. I bought a car here in the US but it is
> registered here and has never left the state.
>
> When you say “probably” is that an answer to my penalty only going back to
> June 15[size=1][url=https://coreballgame.io/][color=#FFFFFF]coreball[/color][/url][/size]? Or that I might be able to get it waived due to bad advice? My
> accountant is still saying it’s not a problem that I didn’t file a T1161
> due to husband living in home currently. He has not provided any
> documentation to back this up.
>
> Thank you for the replies.
I think to understand the parameters you should definitely learn about the structure. It is easy to find diverse sources of information.
> No car worth more than $10000. I bought a car here in the US but it is
> registered here and has never left the state.
>
> When you say “probably” is that an answer to my penalty only going back to
> June 15[size=1][url=https://coreballgame.io/][color=#FFFFFF]coreball[/color][/url][/size]? Or that I might be able to get it waived due to bad advice? My
> accountant is still saying it’s not a problem that I didn’t file a T1161
> due to husband living in home currently. He has not provided any
> documentation to back this up.
>
> Thank you for the replies.
I think to understand the parameters you should definitely learn about the structure. It is easy to find diverse sources of information.
Re: T1161 Spouse still using primary residence
cathyn35 wrote:
"I might be able to get it waived due to bad advice? My accountant is still saying it’s not a problem that I didn’t file a T1161 due to husband living in home currently."
Did you manage to waive penalties?
I'm approximately in the same situation and thinking now about my next move. While I read the CRA guide carefully, this form T1161 was "hidden" under the deemed disposition title. As your immovable property was excluded from deemed disposition requirements, it was only natural for me to see the reporting requirements of T1161 as not relevant to the property specifically excluded. Your accountant must have followed the same reasoning: exclusion from deemed disposition, no capital gains, no reporting needed.
How can I arrange this situation? Do I still send in a late form and try to waive the maximum penalty? Can a sale agreement signed before the departure date be of any help - at least to support your late filing (sale fell through)?
Do I hope that CRA will just forget about this form? The principal residence becomes a rental and will figure in future Canadian returns. No plans to sell it while non-resident - the requirements are too heavy.
Do I send in a pro forma T1161 with other properties not totaling 25k, like an erroneous form? While this form will be late, no penalties will be attributed as the reporting is not necessary but the form will still figure in CRA files without penalties and the day the residence is "discovered", especially when I'm not hiding this, the form will be considered sent.
I'm not familiar with the concept of joint tenancy concerning the residence and I don't know if it contains any requirement of equal shares or if it is shared at all. So, one may presume that his share is not equal and is under 25k so no reporting is needed. If every joint tenant has 100% interest in the property and the other spouse continues to use the residence, who knows, may be the reporting is not necessary. I'm just trying to catch the reasoning of the cross-border accountant who emphasizes the importance of the use of the residence by the other spouse.
I'm looking for any step to get rid of the penalty and all the suggestions are welcomed. The idea that Canada will use my $2500 in a good manner doesn't give me peace.
"I might be able to get it waived due to bad advice? My accountant is still saying it’s not a problem that I didn’t file a T1161 due to husband living in home currently."
Did you manage to waive penalties?
I'm approximately in the same situation and thinking now about my next move. While I read the CRA guide carefully, this form T1161 was "hidden" under the deemed disposition title. As your immovable property was excluded from deemed disposition requirements, it was only natural for me to see the reporting requirements of T1161 as not relevant to the property specifically excluded. Your accountant must have followed the same reasoning: exclusion from deemed disposition, no capital gains, no reporting needed.
How can I arrange this situation? Do I still send in a late form and try to waive the maximum penalty? Can a sale agreement signed before the departure date be of any help - at least to support your late filing (sale fell through)?
Do I hope that CRA will just forget about this form? The principal residence becomes a rental and will figure in future Canadian returns. No plans to sell it while non-resident - the requirements are too heavy.
Do I send in a pro forma T1161 with other properties not totaling 25k, like an erroneous form? While this form will be late, no penalties will be attributed as the reporting is not necessary but the form will still figure in CRA files without penalties and the day the residence is "discovered", especially when I'm not hiding this, the form will be considered sent.
I'm not familiar with the concept of joint tenancy concerning the residence and I don't know if it contains any requirement of equal shares or if it is shared at all. So, one may presume that his share is not equal and is under 25k so no reporting is needed. If every joint tenant has 100% interest in the property and the other spouse continues to use the residence, who knows, may be the reporting is not necessary. I'm just trying to catch the reasoning of the cross-border accountant who emphasizes the importance of the use of the residence by the other spouse.
I'm looking for any step to get rid of the penalty and all the suggestions are welcomed. The idea that Canada will use my $2500 in a good manner doesn't give me peace.
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- Joined: Wed Sep 11, 2024 8:54 am
Re: T1161 Spouse still using primary residence
Hmm...Quite challenging situation..