My husband and I are Canadian Citizens living in the U.S. and we want to sell our property in Canada. My husband is the only one working with a TN Visa, i am currently not employed and only claim rental income from our home in Canada. Our official departure from Canada was July 2009 and, since then, the value of the home has skyrocketed.
The complication is that the home we have in Canada is co-owned with my brother. We own 2/3 of the home and are currently renting out our portion. My brother is living in his portion of the house. We want to sell our portion of the home to my brother.
What are the tax implications of a U.S. resident selling an income property in Canada? Would this be viewed as "selling a home" even though it will still remain with one of the owners? How can we minimize our tax obligations if we choose to sell our portion of the home?
U.S. Resident selling Canadian rental property
Moderator: Mark T Serbinski CA CPA
Have you been correctly doing your 216 return every year, and remittinga portion of the rent to CRA on a monthly basis?
Have you been correctly reporting the income in US along with required depreciation?
The fact that you are selling a portion of the rental should not overly complicate matters. You are a non-resident, soi should look a the compliance required for non-residents.
You will owe Cdn tax on the gains, as well as US tax on the gains and recapture.
Have you been correctly reporting the income in US along with required depreciation?
The fact that you are selling a portion of the rental should not overly complicate matters. You are a non-resident, soi should look a the compliance required for non-residents.
You will owe Cdn tax on the gains, as well as US tax on the gains and recapture.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
Yes, we have been claiming the rental income on both our U.S and CDN taxes and filing our section 216 along with the monthly payments. Are we automatically obligated to paying the 25% withholding tax upon the sale of the property? We just want to know if there's a better way we can not get so heavily penalized by taxes!
Well, you must comply with non-resident sale requirements, one of which is to make a calculation of your taxable gain and have some tax withheld at time of sale.
Done properly, it should come close to what you will pay when you file your Cdn tax return to officially report the sale and determine tax.
Done properly, it should come close to what you will pay when you file your Cdn tax return to officially report the sale and determine tax.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best