Oh, Oh ... not sure what to do .. US Residence

Mswalleye · Post by **Mswalleye** » Sun Jan 01, 2017 7:33 pm

My husband moved to Canada in 2005. He has a house in US that was not sold at the time, didn't realize it could be an issue. He wants to sell in 2017 and I am now reading that the house should have been addressed long ago - with CRA. The only thing to show Fair Market Value when he moved was the tax forms? Any recommendations on how to proceed with this .. 12 years later? thanks

Mswalleye · Post by **Mswalleye** » Sun Jan 01, 2017 7:42 pm

He is a dual citizen.

nelsona · Post by **nelsona** » Sun Jan 01, 2017 9:09 pm

Not sure what you think needed to be done "long ago". As long as the property was not used for rent, there was nothing to report -- taxwise -- to CRA. When he sells it he will owe cap gains tax on the gain it made since he arrived in Canada. He will also have to pay gains on the house in US.
There is no place to put the FMV of any investment including a home on any Cdn tax form, until you sell it.
He should have reported its existence on for T1135, biut only for the last few years. I';m surprised he did not know about this, since it is HIGHLY publicized in Canada at tax time every year. He may have a penalty to pay for not reporting (this is not income tax)>

Mswalleye · Post by **Mswalleye** » Mon Jan 02, 2017 1:25 am

Thanks for the reply. The house was not a rental, we used it as a base when visiting his mother and relatives and when making improvements. She has now passed so we will be selling it. I just assumed that since it was personal use property no reporting was necessary?

nelsona · Post by **nelsona** » Mon Jan 02, 2017 3:01 pm

So, you will need to see how to fix your late or unreported T1135

Mswalleye · Post by **Mswalleye** » Mon Jan 02, 2017 5:43 pm

I am not certain why you are saying Form 1135 would need to be filed? The form info mentions .. Foreign Investment Property that must be included on Form 1135 includes ... blah, blah which is not applicable .. but then mentions

real estate situated outside Canada (unless mainly held for personal use and enjoyment)

which is also not applicable because it was a personal use property so ..

Can you help me see what I am missing or explain why I should be filing this form?

thanks

nelsona · Post by **nelsona** » Mon Jan 02, 2017 11:54 pm

I believe you are reading the form correctly.
THis form is rife with ambiguities, and changes every year accordingly. Best if you keep up with it, rather than me.