Hello Tax Experts,
I was a non-resident of Canada for 2019. In previous years I was a factual resident.
For various reasons, I think I am a deemed resident of Canada in 2020 after spending about 200 days working and living in-country in total.
In 2021, I expect to go back to being a non-resident. Should I be filling out a “deemed disposition” of assets acquired and disposed of during 2020? Or does that not apply to deemed residents?
Deemed Resident for One Year
Moderator: Mark T Serbinski CA CPA
Re: Deemed Resident for One Year
What country were you resident of. Tax residency will be based on the residency clause of that treaty (if any), NOT the number of days you spent in Canada. And if you were in canada due to COVID, then even the taxation of your income in Canada will be limited.
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Re: Deemed Resident for One Year
I was a resident of the US but was working in Bangladesh for the previous year, and claim the FEIE. I came to Canada primarily for family reasons.
Re: Deemed Resident for One Year
So, if you still have the same residency ties in US that you had when you went to Bangladesh (otherwise you would not have had to file a US 1040 tax return), then you should still be able to claim US residency for 2020.
But if you have no home in US, then you are really a factual resisnt of Canada ( a newcomer, technically).
I would need more details.
But if you have no home in US, then you are really a factual resisnt of Canada ( a newcomer, technically).
I would need more details.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Re: Deemed Resident for One Year
Right. The US side is by citizenship only and my residential ties are in Bangladesh I guess.
But on my original question, would a deemed resident (sojourner) need to make a deemed disposition after just one tax year?
But on my original question, would a deemed resident (sojourner) need to make a deemed disposition after just one tax year?
Re: Deemed Resident for One Year
I would say no, you only report actual revenue.
However, as I keep pointing out you cannot be a sojourner if you reside in a country with a tax treaty. Bangladesh has such treaty.
So you can only be:
a factual resident of canada (because of ties in Canada and you do NOT meet the residency of bangladesh rules), and will remain so until you leave.
a deemed non-resident (because despite Cdn ties, you do meet the definition of a residennt of Bangladesh), which is the same as non-resident.
However, as I keep pointing out you cannot be a sojourner if you reside in a country with a tax treaty. Bangladesh has such treaty.
So you can only be:
a factual resident of canada (because of ties in Canada and you do NOT meet the residency of bangladesh rules), and will remain so until you leave.
a deemed non-resident (because despite Cdn ties, you do meet the definition of a residennt of Bangladesh), which is the same as non-resident.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Re: Deemed Resident for One Year
Ahh... I see. So the tax treaty will effectively make me a resident of one or the other country.
Re: Deemed Resident for One Year
Correct. If you meet the residency rules of both countries, then by going through the tie-breakers in the Residecy article, it will come down on one side or the other.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing