confusion on incomes to report on multiple 2017 tax returns

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hs8484
Posts: 3
Joined: Sun Apr 15, 2018 7:48 pm

confusion on incomes to report on multiple 2017 tax returns

Post by hs8484 »

I moved from Quebec to Washington state at the end of November 2017.
From Jan 2017 to end of November 2017, I lived in Quebec and had a Canadian salary (with a work permit).
In December 2017 I lived in the Washington State with a US salary and received a W2 (with a L1 visa). I was in the US on December 31st 2017. I don't meet IRS’s Substantial Presence Test for 2017.
During the entire year, Jan to Dec, I received rental income from a property in Illinois.

My understanding, that I would like to double-check, is that for tax purposes I am a Canadian resident and a non US resident (1040NR form) for the entire year 2017. On my Canadian tax return, I should include incomes from all sources (US and Canadian) for the period I was in Canada, i.e. from January to November. US incomes from December (rental income and W2) should not be included in the Canadian tax return.
On my US federal tax return (1040NR) I should mention all US incomes for the whole year (rental income and December W2). On my Illinois state tax return I should mention the Illinois rental income from the whole year as well.

Is my understanding correct?

My rental incomes from January to November would be listed on my Canadian tax return, Quebec tax return, US federal tax return and Illinois tax return. How do I prevent from being taxed on it multiple times?
nelsona
Posts: 18353
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

You are a tax resident of Quebec until November 2017, when you left. You file a departure return for Canada and QC, with those dates. You report income to Canada for those dates only, as you said.

You are a non-resident of US for filing purposes (1040NR) and report only the US income you earned in 2017, including all the rental income. Canada will credit you any US/IL tax you paid on the rental income you report in Canada (ie 11/12ths of the year)
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
hs8484
Posts: 3
Joined: Sun Apr 15, 2018 7:48 pm

Post by hs8484 »

[quote]You file a departure return for Canada and QC, with those dates.[/quote]
On the T1 General form, I believe this is indicated by answering "Quebec" for "Enter your province or territory of residence on December 31, 2017" (even though I was in the US on Dec 31st) and adding my departure date at the following "If you became or ceased to be a resident of Canada for income tax purposes in 2017, enter the date of". This is on the federal Canadian return. Is there any such place in the Quebec return form that will indicate this is a departure return ? Are there any other information I need to provide or forms I need to fill regarding my departure? (In case this is relevant, I am/was not a Canadian citizen or permanent resident as I was working in Canada with a work permit).

[quote]Canada will credit you any US/IL tax you paid on the rental income you report in Canada (ie 11/12ths of the year)[/quote]

How do they know to credit me with US/IL taxes I paid on the rental income I reported in my Canadian/Quebec returns? Should I myself deduct the taxes paid on US rental income for January to November based on my IL/US tax returns, and report the rental income minus US/IL taxes on the Canada/Quebec returns?



[/quote]
nelsona
Posts: 18353
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

All income you report on your Cdn return is before any tax.
There is a line of each of the returns to calculate foreign tax credit.
Your tax softare will guide you, otherwise this is getting inot the "how do I do may taxes" type of question, which I will not answer at this late date.
See my signature
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
hs8484
Posts: 3
Joined: Sun Apr 15, 2018 7:48 pm

Post by hs8484 »

This helps, thanks.
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