Tax implication of US citizen with US investment property

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yankee_canuck
Posts: 3
Joined: Thu Oct 24, 2013 2:11 pm

Tax implication of US citizen with US investment property

Post by yankee_canuck » Fri Oct 25, 2013 12:29 pm

Hello,

I have investment property which generates positive cash flow and potential capital gain longer term. I'm considering transferring deed from US LLC to US citizen and relocating to Canada. I know need to file US tax return in Canada. But was curious about the tax implications of having investment property in personal name instead of LLC. Any insights on this would be greatly appreciated.

Thank you in advance.

yankee_canuck.

JGCA
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Joined: Thu Nov 18, 2010 3:05 pm
Location: Montreal, QC Canada

Post by JGCA » Sat Oct 26, 2013 10:59 am

Holding it personally instead of an LLC is a much easier solution, you would simply report the investment income on the T1 return and if you are required to file a 1040 this is also reported on that also. I imagine its real property that the deed refers too so you will have witholding tax on any rental income to send into the IRS even if you do not file a 1040 and credit is given to you on the T1 for this tax paid. An LLC is complex its treated as a corp for CND tax purposes a T2 is filed the income is traeted as dividend income and no matching will occur unless the income was physically paid to you in the same calender yr to get the tax credit, holding it personally is much easier.
JG

yankee_canuck
Posts: 3
Joined: Thu Oct 24, 2013 2:11 pm

Post by yankee_canuck » Mon Oct 28, 2013 9:30 am

Thank you for reply. I was leaning towards holding it personally too. If relocating to Canada, does CDN law require reporting US income rental income if residing less than 183 days/yr?

nelsona
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Post by nelsona » Mon Oct 28, 2013 9:49 am

Yes. Relocating to Canada, regardless of how few fdays. makes you Cdn resident for tax purposes -- and taxable on world income -- from that day forward.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

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