Sale of home by US spouse being sponsored for Canada PR

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ezgrower
Posts: 8
Joined: Tue Mar 06, 2018 4:00 pm

Sale of home by US spouse being sponsored for Canada PR

Post by ezgrower »

I'm in the middle of the process of sponsoring my US spouse for permanent residence in Canada (waiting for sponsorship approval). She currently lives in Ohio in a house that I bought in the late '90s (I worked in the states for 25 years) and signed over to her in 2014. Hers is the only name on the deed. We divorced in 2014, and subsequently remarried in 2017. I live in Canada, visit regularly, but have no financial connection to the U.S. (no bank accounts, no income). She files U.S. taxes as married-filing-jointly.

We assume PR visa will be issued in 2020; plan is to sell the house once PR visa is approved and bring proceeds when she make the move to Canada. The house is her principal residence, and she will not be subject to taxation of capital gains. My question: will she/we have to report this sale on Canadian income tax return?
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
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Re: Sale of home by US spouse being sponsored for Canada PR

Post by nelsona »

She would only need to report it if it is sold after she becomes Cdn tax resident. Even then, at most she would be taxed on the gain after her arrival in Canada, and could even clain that this was still her Principal residence.

If any case, unless it takes a copule of years to sell, she should have no tax worries in Canada on that.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
ezgrower
Posts: 8
Joined: Tue Mar 06, 2018 4:00 pm

Re: Sale of home by US spouse being sponsored for Canada PR

Post by ezgrower »

Thank you for your quick response, - thant's one less thing for us to worry about! I really appreciate the information and advice you provide here - you've helped a great many people!
ezgrower
Posts: 8
Joined: Tue Mar 06, 2018 4:00 pm

Re: Sale of home by US spouse being sponsored for Canada PR

Post by ezgrower »

A quick follow-up questions...

Among CRA's criteria for determining residential status for tax purposes is a spouse in Canada. For my wife, this seems to be the only criteria that ties her to Canada - she is currently a US citizen, her principal residence is in Ohio, and her employment is in Ohio. She's only been to Canada for short periods of time (<1 month at a time and less that 3 months in any year) to visit me. Am I correct in thinking that she would only achieve Canadian tax residency after she has received her PR visa and moved to Canada?

Thanks again for your thoughts.
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Sale of home by US spouse being sponsored for Canada PR

Post by nelsona »

The "spouse in Canada" is really only applied if one is leaving Canada and leaves spouse behind in Canada. Even then, the treaty would override this if the person is really making their home and life in US, which, until your spouse moves to Canada (with or without PR status).
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
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