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 »

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
Posts: 754
Joined: Thu Nov 18, 2010 3:05 pm
Location: Montreal, QC Canada

Post by JGCA »

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 »

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
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

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. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
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