Departure return from Canada, forms to file with CRA and IRS

dorins · Post by **dorins** » Sun Mar 02, 2014 6:43 pm

I am looking for the relevant forms I need to file with CRA for my departure return and I am confused between T1161, T1243, T1244, T2062, T2062A, T2091 etc... Help is appreciated.

Emigrated from Canada to US on 4/1/2013.
I have a principl residence on the market in Canada. Not rented. Target sale June 2014. I anticipate a sale at or below FMV at the time of my departure from Canada.
I have RRSPs in Canada, which I have not touched since my departure.
I have no other stocks, properties or otherwise.

My plans are:
For CRA
1. For the real estate property file T2062A and T2091.
2. For RRSPs file T1243.

For IRS
3. Nothing for the house in Canada
4. File FBAR, 8938 ans 8891 for the RRSPs

Are these the correct forms? If not, which ones apply in my situation?
Many thanks as always.

Dorin S

nelsona · Post by **nelsona** » Sun Mar 02, 2014 7:20 pm

1. Not until you actually are selling
2. NOt correct. RRSPs are not subject to deemed disposition

3. Correct, unless you sell more than 3 years from departure, or you rent out, or you make more than $20K profit.

4. sounds right, plus any other accounts you have in Canada.

dorins · Post by **dorins** » Sun Mar 02, 2014 7:33 pm

Thank you, Nelsona.
For the house in Canada, I am planning to obtain a Certificate of Compliance for a proposed disposition, in advance of the actual sale, to avoid having taxes withheld. Are these the proper forms for this purpose? T2062, T2091.

nelsona · Post by **nelsona** » Sun Mar 02, 2014 7:37 pm

yes, but the sale must be in the works, not just "anticipated"

dorins · Post by **dorins** » Sun Mar 02, 2014 8:26 pm

Underrstood about the sale, thanks again.
Also, a side note on 8891, for undistributed earnings it reads "Interest income. Enter here and include on Form 1040, line 8a..........." This would actually add to my taxable income. How do I actually defer this? Unless the form is wrong.

nelsona · Post by **nelsona** » Sun Mar 02, 2014 8:33 pm

Once you elect to defer taxation, line 6, you don't fill in those lines.

dorins · Post by **dorins** » Sun Mar 02, 2014 8:49 pm

A little tricky for me...
Last year I field a 1040 (LPR but commuter from Windsor to Detroit) as full year resident.
I also filed the 8891 until line 6.
So this year would be my second year of 8891 reporting. Per the form instructions I need to go further down the form.

"If â€œYes,â€ enter the first year the election came into effect
and go to line 7a."

dorins · Post by **dorins** » Sun Mar 02, 2014 9:26 pm

Figured it out.. check 5a Beneficiary, 6 a Yes (previous election to defer) and only line 8 year-end balance.

dorins · Post by **dorins** » Tue Mar 04, 2014 12:39 pm

Understood the US side, FBAr and 8891, 8938.
For the Canadian side real estate:
The house was acquired in 2002 for $272K, FMV on departure (04/01/2013) was $309K. No rental income. USed as principal residence all these years (12 years).

Are these actions correct?

1. Obtain "official" FMV valuation for house at departure date and file 2061.
The capital gain of $37k would be exempted. I need to show this on Schedule 3 on my CAN return.
2. When I have an offer for purchase, file 2062 and 2062A (do I still need the 2062A?) and 2091. 2091WS should not apply to me as I acquired all my invstments after 1995.

Thank you again, Nelsona

nelsona · Post by **nelsona** » Tue Mar 04, 2014 1:22 pm

This is not the correct process when selling your former home as a non-resident, because ALL the cap gain, even the portion after you leave will be tax-free , and if you do sell past the one year mark, the T2062 form will calculate the tax that you report.

Unless you rent it out, there is nothing to file or report until you actually are going to sell the property (ie. it is under contract). At that point you have your broker/lawyer prepare the forms.

DO NOT report the property as deemed sold. Do NOT make this election.

DO have an FMV done, as this will be useful later, should you delay in selling or later change to a rental, for both US and CDn tax purposes.

dorins · Post by **dorins** » Tue Mar 04, 2014 2:00 pm

I see, thank you Nelsona.

If that is the case, since all I have left in Canada are RRSPs and the house, then I shouldn't file these forms either? T1161, T1243 adn T1244?
Do I need to tell CRA now that I have a house left in Canada which used to be my principal residence or that can wait until I actually sell it?

I have no Canadian income for FY2013 nor rental, other stocks, properties etc,

Thanks again.

dorins · Post by **dorins** » Tue Mar 04, 2014 2:09 pm

Just to clarify, I saw in a similar topic that - especially since I anticipate a lower selling price than the FMV at departure - I should fill in T2061 and declare a "deemed disposition" of the principal residence. Since I was a resident until departure the gain would be exempted from tax.
When I sell, I fill out 2062/2062A and 2091 for the certificate of clearance.

I must have misunderstood something....

nelsona · Post by **nelsona** » Tue Mar 04, 2014 2:42 pm

T1161 should report your house. The FMV is not used for tax purposes, but should be reported, along with maybe your car.

T1243 is only if you have deemed dispositions, which you do notm abd would not include your house anyways. Same for T1244.

I've arlrady told you multiple times that one doesn't report the possoible sale of teh house to CRA. You report nothing untiul it is about to be sold.

The only time you would deem the sale if if there was already some taxable cap gains on the property, from, say a previous time when the home was not your principal residence, or if you had used the home for other purposes.

You are making this much too complicated.

dorins · Post by **dorins** » Tue Mar 04, 2014 3:28 pm

I totally am making it complicated.
Thanks again for your advice and patience!

dorins · Post by **dorins** » Tue Aug 05, 2014 4:54 pm

Left Canada on 4/2013, at which time the FMV of my residence was 309K.
I have now a signed Purchase & Sales Agreement for less than FMV (297K).

Since there is no capital gains, no tax to withhold, do I still need to file anything with CRA (T2062, T2091)?

Thank you

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