What should be my residency status for this year?

[clutch]

Hi, I'm planning to relocate to the US for a new job later in August this year. I will be on an O-1 visa. I plan to sell my principal home in Canada shortly after I leave.

What would be my residency status for the tax purposes? Is it correct that I would have an option to be considered as the US tax resident using the first-year choice? Are there any benefits of doing so considering the tax rate would be lower in the US?

I heard that there are some complications when selling a home as a non-resident. Would it be better to stay as a resident of Canada for this year? And could I still be considered as a resident this even if I sell my principal home?

Thanks.

[nelsona]

You will be non-resident of Canada the day you move. You will file a tax return with a departure date.

For US, you will have the choice of filing as a non-resident (1040NR) reporting only US income, or filing a full year 1040 reporting all world income and then excluding your Cdn wage , if any. Whichever one results in least US tax It is rarely to your advantage to file a part-year 1040/1040NR, which is what the 1st year choice puts you in.

How you file in US has no bearing on your Cdn tax status. You will have left Canada and living in US. That is sufficient by treaty, even with the house in Canada