Sale of home in Canada as a US Perm Resident

[philweicker]

I am a US permanent resident and have not been a Canadian tax resident since 2008.

I sold a house in Canada (which was never my primary residence) in 2016.

A T2062 was filed, a certificate of compliance obtained, and 25% of the gains was remitted to CRA.

Either the gains are entirely taxable in the US, or not. Does anyone know how the tax treaty handles this?

Once that is understood I would like to know how specifically to file my US and Canadian returns.

[nelsona]

The gains are entirely taxable in US -- calculated in USD exchange in effect at time of purchase and time of sale -- with credit given for Cdn tax paid.

Only primary residences has special treatment

[philweicker]

So I should file a non-resident T1 and claim all the Canadian taxes back?

Do I need to include a note to say that the gains are not taxable as part of a treaty?

[nelsona]

You will have tax in Canada, as I said, it will be credited on your US tax return.

When I said "entirely" taxable in US, I meant that the entire gain is taxable, not simply that which occurred after moving to US.

To have avoided US tax on pre-arrival gains, you would have had to trigger Cdn tax at time of departure.

[philweicker]

I purchased this property after departure. I didn't own it while I lived in Canada. I was a US resident at the time of purchase.

[nelsona]

Ok
So my previous answers apply

[philweicker]

OK--but am I correct to assume that the 25% held back in accordance with the T2062 is still more than I should be paying in Canada, and I would claim back some on a T1 NR?

[nelsona]

Yes
You must file a non-resident return to determine the exact tax owed