I am an American living in Canada with PR status with my Canadian wife. I just filed my US return as 'Joint' and included my wifes US Social Security income, but not her Canadian pensions income. I did that on the basis that her income was generated in Canada, but am now wondering if I did wrong. Did I? We are both retired.
I have searched a bunch on this forum and could not find the answer, so thank you very much for your help in this busy time. And thanks for the wonderful forum too!
Rod
US Joint Return Question
Moderator: Mark T Serbinski CA CPA
Thank you very much for your response. It seems that I will have to submit an amended return. So I now have some choices:
1. File an Individual return as I have done the past several years. ( We have been married since July 2003.)
2. File a new joint return that shows all of my wifes income. Besides two pensions this will include income from her house in Canada. It was rented out from the time she bought it a few months before our marriage until October of this year when we moved into it.
If I do this I think I will need to depreciate the house while it was rented. If I do that several questions:
A. When do I start depreciating it?
B. Do I then have to amend my prior few years returns to joint to show this?
C. What happens to the depreciation when we moved into the house in October?
I think I will be ahead of the game with the joint return, but it seems that it has gotten very complicated.
Do you have any other thoughts on this?
Thanks again,
Rod
PS I have been a PR since June 06.
1. File an Individual return as I have done the past several years. ( We have been married since July 2003.)
2. File a new joint return that shows all of my wifes income. Besides two pensions this will include income from her house in Canada. It was rented out from the time she bought it a few months before our marriage until October of this year when we moved into it.
If I do this I think I will need to depreciate the house while it was rented. If I do that several questions:
A. When do I start depreciating it?
B. Do I then have to amend my prior few years returns to joint to show this?
C. What happens to the depreciation when we moved into the house in October?
I think I will be ahead of the game with the joint return, but it seems that it has gotten very complicated.
Do you have any other thoughts on this?
Thanks again,
Rod
PS I have been a PR since June 06.
If you file joint, you MST include her income. You can file Married filing separately for any year. But you can never file SINGLE.
Depreciation starts immediately. Depreciation is reduced your 'cost' in the house, and thus increases the capital gain when selling.
You can read about this on IRS website.
Depreciation starts immediately. Depreciation is reduced your 'cost' in the house, and thus increases the capital gain when selling.
You can read about this on IRS website.
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
Nelsona, Thanks again for your response. I did not use the correct term for my filing status. Since being married I have filed "Married filing separate.
I understand depreciation (I think) as I have a rental property in the US. My question is that since the house was owned by and rented out by my Canadian wife and I have been doing "filing separately" without her or the house on my returns, it seems that I can only start depreciating it on my return when I start to file Joint. Is that not correct?
My second question is that if I only do show it for 2007, and we ended the rental in October, should I just continue filing Separate returns and avoid the complexity of listing a basis for the house, then depreciating it, then returning it to owner occupied? I will pay higher tax this way, but might I avoid a lot of potential complication and grief with the IRS in the future?
Sorry if I have presented this in a confusing manner! And thank you again for all your help.
Rod
I understand depreciation (I think) as I have a rental property in the US. My question is that since the house was owned by and rented out by my Canadian wife and I have been doing "filing separately" without her or the house on my returns, it seems that I can only start depreciating it on my return when I start to file Joint. Is that not correct?
My second question is that if I only do show it for 2007, and we ended the rental in October, should I just continue filing Separate returns and avoid the complexity of listing a basis for the house, then depreciating it, then returning it to owner occupied? I will pay higher tax this way, but might I avoid a lot of potential complication and grief with the IRS in the future?
Sorry if I have presented this in a confusing manner! And thank you again for all your help.
Rod