Residence

1904baydrive · Post by **1904baydrive** » Sat Mar 12, 2016 11:36 am

I moved to the US from Canada in Nov. 2013. I finally sold my former principal residence which is located in Toronto this month. I have have an appraisal for the house's value from Nov. 2013. How do I establish with the IRS the stepped up cost basis for the house from my departure date back in Nov. 2013 so I don't pay taxes on the capital gains from 2004 to now ( I bought the house back in 2004 and was always my principal residence - the appraised value on Nov. 2013 was much much greater than the price I paid back in 2004). Thank you.

nelsona · Post by **nelsona** » Mon Mar 14, 2016 10:38 am

Nothing gets sent to IRS for this. You simply keep any records that show when you lived in the property. You are allowed 3 years from leaving the house twithout having to pay any US cap gains.

You are only free of cap gains if you ddi not rent out the place in the last 2 1/2 years. Did you?

You will have to pay some Cdn cap gains, based on the years + 1 formula, which will be better than the change of use formula (roughly 10/12ths of the total gain will be excluded) , based on when you left Canada, You cannot claim PR for home in Canada when non-resident.

1904baydrive · Post by **1904baydrive** » Mon Mar 14, 2016 10:45 am

Thank you for the reply. I started renting it out in January 2015 but the appraised value in Canadian dollars did not change from Nov. 2013 to Jan. 2015 (although in US dollars it dropped by $100k because of the exchange rate). Can I deduct the $100k loss on my 2015 US tax return (based on the change in value in US dollars from Nov. 2013 to Jan 2015)?

nelsona · Post by **nelsona** » Mon Mar 14, 2016 11:04 am

You cannot take a loss from before jan '15.

So the only tax you should have to pay in US is recovery of your depreciation, which you MUST have for rental income.
You also have all the Cdn non-resident form to file of=r face penalty. What was the departure date you listed on your 2013 Cdn return?