Filing for year returning to Canada
Moderator: Mark T Serbinski CA CPA
Filing for year returning to Canada
Canadian returned to Canada from US after 5 years on TN in July, electing to file full year 1040 (no need for 2555 as no Canadian wages earned after July). Do I still file for Cdn taxes starting in July?
You should, just to go on record with arrival date to establish FMV date for deemed acquisition. As well, if you have a Roth you need to submit the Roth statement. And to entitle you to any benefits you may be eligible for (GST, CCTB, etc).
It is never a god idea not to file.
It is never a god idea not to file.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
[quote="nelsona"]As well, if you have a Roth you need to submit the Roth statement. And to entitle you to any benefits you may be eligible for (GST, CCTB, etc).
It is never a god idea not to file.[/quote]
I do have a Roth. The statement you're referring to is to make a one-time irrevocable election to defer Canadian taxation on income earned in the Roth IRA? This is done when filing for the tax year of return?
Was not suggesting not filing, just was thinking that if I'm electing to file a full year 1040, I'm not yet considered a tax resident in Canada. Clearly it's based on exact arrvial date though.
It is never a god idea not to file.[/quote]
I do have a Roth. The statement you're referring to is to make a one-time irrevocable election to defer Canadian taxation on income earned in the Roth IRA? This is done when filing for the tax year of return?
Was not suggesting not filing, just was thinking that if I'm electing to file a full year 1040, I'm not yet considered a tax resident in Canada. Clearly it's based on exact arrvial date though.
I think you answered your own question: ELECTING to file full year in US doesn't mean you were full year resident, otherwise you wouldn't ELECT to file full year, you would file full year.
It's exactly as in the year you arrived in US. you had a specific departure date from Canada, but had several choices on how to file in US.
"The statement you're referring to is to make a one-time irrevocable election to defer Canadian taxation on income earned in the Roth IRA? This is done when filing for the tax year of return?". If you read the notice you would know that is the case.
It's exactly as in the year you arrived in US. you had a specific departure date from Canada, but had several choices on how to file in US.
"The statement you're referring to is to make a one-time irrevocable election to defer Canadian taxation on income earned in the Roth IRA? This is done when filing for the tax year of return?". If you read the notice you would know that is the case.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Thanks for the insights nelsona. Because I filed for a full 1040 in the US during my departure year, I indicated full year income on a US rental property. I had an IRS tax refund in total (although it was reduced due to the net income generated on US rental...so I was fully taxed on this property). How am I able to claim FTC credits though to reduce or eliminate tax burden on the US rental for CRA for the part of the year I was back in Canada?
Your refund or not has nothing to do witt this. Each dollar of income is taxed the same amount. You lok at total income, and total tax, and divide to get a rate.
You get credit the same as with any other US income you will have that year or any other.
The portion of US-sourced income you report on your Cdn return, prorated over all your US tax, and US tax prorated at this amount.
Quick example:
You had $1000 of world in come on your 1040, and you paid $250 in US income tax (or a 25% effective rate). $200 was your net rental income for the year. $80 of that net income was from the time after you returned to Canada. So, 25% of $80 is the US tax that you can use on your Cdn tax return.
on your Cdn return, you calculate your rental income (you figure rental income the by the rules of Canada). say it comes out to $100. That is your US source rental income. Against that, you can claim the US$20 you determined above.
This what you will be doing every year while you own and rent this US property.
You get credit the same as with any other US income you will have that year or any other.
The portion of US-sourced income you report on your Cdn return, prorated over all your US tax, and US tax prorated at this amount.
Quick example:
You had $1000 of world in come on your 1040, and you paid $250 in US income tax (or a 25% effective rate). $200 was your net rental income for the year. $80 of that net income was from the time after you returned to Canada. So, 25% of $80 is the US tax that you can use on your Cdn tax return.
on your Cdn return, you calculate your rental income (you figure rental income the by the rules of Canada). say it comes out to $100. That is your US source rental income. Against that, you can claim the US$20 you determined above.
This what you will be doing every year while you own and rent this US property.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing