foreign currency handling of sale of main home

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nelsona
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Post by nelsona »

You may be subject to sufficient other tax to duck below AMT, but I doubt it.

However your foreign income is used to determine AMT, thus your foreign tax credit may not help you.

Spend the $26 and get yourself Turbotax, eh.

<i>nelsona non grata</i>
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
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Post by nelsona »

What was not relevant was your elaborate and convoluted cap gains calculations. This was merely an exercise in picking favourable exchange rates.

Peters out of the East Coast wrote a great paper on why Cdns can use FEIE to exclude Cdn earned income in their US arrival year (meaning that one would absolutely NOT have to file as a US taxpayer in the previous year).

He joined a big firm and minimized his website (although I probably couldn't post it here anyways).


<i>nelsona non grata</i>
nelsona
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Post by nelsona »

Each year, every single Canadian resident or citizen, has the treaty-given right to file a full-fledged US 1040, just like any other US citizen.

In years that he does not have to (whether by IRS regulation, or by virtue of the residency tie-breaker), the Cdn can choose not to file in US (29 million Cdn implicitly make this 'choice' every year). The choice made in one year has no impact on other years.


So, if you qualify for FEIE, in 2004, then you qualify in 2004. Period. The same would be true in the year after you leave US. You don't have to file duaul-status in that year either, since all you need to do is file normal 1040, and exclude your Cdn earning after your return to Canada. Only difference is that you have to actually wait the full year in order to meet FEIE 'foreign tax home' requirement, but it can be anytime in the following year.

Choosing FEIE in the emigrating year does involve using the anti-discrimination clause in a very subtle manner: One has to point to a US treaty that gives this right to citizens of ANOTHER country (eg Germany) and then by anti-discrimination, state taht since a German National has the right, so does a Cdn, (That is what is meant by 'third-state' clause in XXV.2). Pretty fancy.

Steve Peters of KPMG (used to be on his own) drafted a good article on this.



<i>nelsona non grata</i>
nelsona
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Post by nelsona »

I'm said about all I'm going to say on this thread

<i>nelsona non grata</i>
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
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Post by nelsona »

I dare say you don't have a tax advisor, just someone wanting to collect money to submit your taxes to the Gov't.

<i>nelsona non grata</i>
wology
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Joined: Fri Jun 16, 2023 5:25 am

Re: foreign currency handling of sale of main home

Post by wology »

it Wow, I liked it!
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