Moving to US but want to keep investment properties in Can

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Waters
Posts: 11
Joined: Thu Jan 09, 2014 12:33 am

Moving to US but want to keep investment properties in Can

Post by Waters »

Got a permanent job offer from an US employer, plan to move to US for extended
Period,like to know
What are tax consequences if we keep properties (rent out) in Canada ?
Pros and cons.

Thanks,
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

Not a problem. It will not keep you tax resident of Canada. Your net rental income will be subject to flat 25% tax rather than graduated rates, and you will have to have someone remit tax monthly to CRA. You will have yearly section 216 tax return to file in Canada to determine the final Cdn tax.

The income will also be reported in US, with credit given for the Cdn tax. The income/expense rules are about the same for both countriefinal s, except that for IRS you MUST depreciate yearly, while in Canada you can use CCA. It would be advisable to begin using CCA in Canada if you are not already, so that your tax in both countries meshes better. You do not want to get into a situation where you are taxable in canada on your rent, but not in US because of depreciation.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
Waters
Posts: 11
Joined: Thu Jan 09, 2014 12:33 am

Post by Waters »

nelsona,thanks
Good points on CCA .

If we decide to sell main residence before move, not sure how it would be taxed.
I will go to south 1st, see this May to start work, my wife and child will join me this Septempber, so plan to sell the house in August or July.

So capital gain is tax free in canada , but how is US side?
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

The sale of your former principal residence (assuming you never rented it out) is tax-free in Canada if you sell up to one year after leaving canada.
It is tax-free in US if you sell upto 3 years after leaving Canada.

So, no need to rush a sale through before leaving, not for tax puposes at any rate.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
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