Tax Advice for US residents sold Canada House last year

[xkrz]

Hi,
I and my wife moved to the US a few years ago, but kept my Canadian house rented out until last year when I sold it. For the past years' rentals, I had been doing NR4 + S216. Since I sold the house, the tax seems to be more complicated. I was thinking of getting a CPA, but the quotes were really high ($5-6K). That got me thinking if I should just file on my own. Has anyone done this by themselves? If so, can you share your experience, and what to watch out for?

At this time, I do have the clearance certificate from Canada; from what I gather, the Canada side taxes are straightforward based on capital gain (I could be wrong here); What is not clear to me is the US part. For example, how to ensure tax credits for Canada’s tax are used correctly for the year in the US?


For the past two years, my work assigned me an accountant to help with the taxes. After that, I have been filing the yearly tax (including the rental) on my own. I vaguely recall the accountant mentioning that my home was converted to rental/business, but I can’t find any forms that indicated so. If anyone knows if there is some form I should check, that would be helpful.

[nelsona]

As long s you have a good valuation from the time you left canada/began renting, the taxes are quite straight forward.
For Canada you get an extra year of principle residence exclusion in calculating your overall gain. (ie. if you left 6 years ago, you only count 5 years as taxable gain bases on the overall gain since you bought)
For US your gain will be based on the sale proceeds minus value when you left plus depreciation recapture.
That tax you owe in Canada is simply used on a form 1116 passive income against the US tax. (much like you were doing for your rental income, except that now it includes cap gains)

An accountant would not be providing anything close to $5K's worth of value to you.

[xkrz]

Thank you, nelsona! I can't recall if my accountant have submitted any form to change my house to be business rental instead of principal residence. Do you know if this is a thing, if so, how can I check?

[nelsona]

I know of no such form, in either US or Canada, and even if there was, I do not believe it would impact your taxes in year of sale.