Hi,
I am about to move to the USA on a TN visa. I am using this status to get closer to mt girlfriend which is a us citizen residing in the USA.
I also intend to keep my house in Canada and rent it to my parents. I read on the internet that rented properties is not considered ties to Canada if it is rented to non-arm's length renters. Would renting to my parents makes it harder for me to prove non-residency for tax purposes in Canada?
Please not that I do intend to to move from TN to GC in the future when my girlfriend has settled her divorce. I know that in order to get my TN status I will have to avoid sharing that information with the boarder officers.
Thanks in advance for any insights you could supply me.
Thanks & regards,
Jonathan
Best tax strategy for TN status holder
Moderator: Mark T Serbinski CA CPA
Once you are physically working and living in US, you are no longer considered Cdn resident, by treaty, regardless of any property you might own or have access to in Canada.
So, you will be considered by CRA to have departed Canada when you leave for work. So, plan accordingly in terms of getting rid of TFSA, deemed disposition of your assets when you leave, etc.CRA closed this loop-hole several years ago to prevent straddlers from avoiding departure tax.
If your goal IS to break resisncy, then do not worry about arm's length vs non-alrm's length. The treaty makes you non-resident of Canada.
You will need to be careful on the rental, as if you rent below market value, or if there appears to be no profit motive, either CRA or IRS could deny any expenses against your rental income. You will also need to remit 25% of the rent monthly to CRA, until you establish the net rental income using form NR6.
So, you will be considered by CRA to have departed Canada when you leave for work. So, plan accordingly in terms of getting rid of TFSA, deemed disposition of your assets when you leave, etc.CRA closed this loop-hole several years ago to prevent straddlers from avoiding departure tax.
If your goal IS to break resisncy, then do not worry about arm's length vs non-alrm's length. The treaty makes you non-resident of Canada.
You will need to be careful on the rental, as if you rent below market value, or if there appears to be no profit motive, either CRA or IRS could deny any expenses against your rental income. You will also need to remit 25% of the rent monthly to CRA, until you establish the net rental income using form NR6.
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
Thanks very much for your answer nelsona.
Non-resident of Canada for tax purposes is my goal and I want to make sure I will not have dual taxations.
The rental will be at market value, however it will barely cover the expenses (mortgage, property taxes, etc.).
So if I understood properly, i will have to file that NR6 yearly to CRA as well as file my revenue taxes with IRS. Will I need to declare my rental revenue to IRS also?
Thanks and regards
Jonathan
Non-resident of Canada for tax purposes is my goal and I want to make sure I will not have dual taxations.
The rental will be at market value, however it will barely cover the expenses (mortgage, property taxes, etc.).
So if I understood properly, i will have to file that NR6 yearly to CRA as well as file my revenue taxes with IRS. Will I need to declare my rental revenue to IRS also?
Thanks and regards
Jonathan