Answers Archive

What is the difference between them? Which one to use?

Dear Janis, Thank you for reaching out with your detailed questions. Below is an overview of the four methods you mentioned and when each one is applicable: Change My Return – This is an online option available through CRA’s My Account for making simple adjustments to previously filed returns. It’s generally the easiest way to … Continue reading

Bank issued t5 instead of NR4

Dear Leo, Thank you for your question. Since you are a non-resident of Canada and will be filing as a resident tax alien in the US, there are a few important considerations regarding the T5 versus NR4: Difference Between T5 and NR4 A T5 (Statement of Investment Income) is typically issued to Canadian residents and … Continue reading

REFERENCE : Emigrant tax return, Principal Residence transferred to son, Son in Canada. Issues?

Hi TJ, Thank you for reaching out. I appreciate the detailed background, and I’ll do my best to clarify your situation. Here’s a breakdown of key considerations and next steps: Residency Status & Filing Corrections Since you departed Canada in April 2021 but continued filing as a resident for 2021, 2022, and 2023, you will … Continue reading

T1135 – Joint Foreign Bank more than $ 1,00,000 in it. How do we report it? Husband & Wife.

Dear Aliki, Thank you for reaching out with your question regarding the T1135 Foreign Income Verification Statement. I’d be happy to clarify how you and your husband should report your joint foreign bank account. Reporting the Foreign Bank Account on T1135 Since the account is jointly held, both you and your husband must file separate … Continue reading

Do my spouse and i need to file tax return for the year 2024

Dear Mr. Prasad, Thank you for reaching out. I appreciate the detailed background you’ve provided. Since you and your spouse became Canadian permanent residents in 2023, the key factor in determining your tax filing obligations is your Canadian residency status for tax purposes. Generally, tax residency is based on significant residential ties to Canada, such … Continue reading

Emigrant tax return, Principal Residence transferred to son, Son in Canada. Issues?

Dear TJ Thank you for reaching out. I understand that this situation has been stressful for you, and I want to assure you that we can work towards resolving it in the most tax-efficient way possible. Below, I’ve outlined the key considerations and next steps regarding your departure from Canada, the transfer of your home, … Continue reading

Departure tax return forms

Dear LK, Thank you for reaching out. If you departed Canada on January 1, 2024, you will generally be required to file a final Canadian tax return for the 2024 tax year, in addition to Forms T1161 (List of Properties by an Emigrant of Canada) and T1243 (Deemed Disposition of Property by an Emigrant of … Continue reading

Question regarding Foreign exchange rate gain Tax

Subject: Re: Question Regarding Foreign Exchange Rate Gain Tax Dear Xiaowei, Nice to meet you, and thank you for reaching out. I appreciate your detailed question regarding the foreign exchange rate gain and Section 988 taxation. You are correct that under U.S. tax law, foreign currency gains or losses related to mortgage settlements can be … Continue reading

Investment strategy to pay least tax

Hello, In Canada, there are no gift taxes, so you are allowed to gift money to your parents without immediate tax consequences. Your parents can then contribute these funds to their TFSA, provided they have available contribution room. Any investment growth within their TFSA would be tax-free, and they would not incur taxes when withdrawing … Continue reading

NR6 /NR4 for rental property in Canada

Dear Joey, Thank you for reaching out! Since 2024 was your first year collecting rental income in Canada, you’ve correctly withheld and remitted 25% of the gross rent. Regarding your questions: NR6 Filing: If you plan to move back to Canada this year and become a Canadian tax resident, you no longer need to file … Continue reading

What is the deal here???

Hi Michèle, Thank you for your question! You raise an important point about tax compliance when leaving Canada and living abroad. 1. Departure Tax & Residency Rules When a Canadian taxpayer permanently leaves Canada, they may be considered a non-resident for tax purposes. This means they are required to: ✔ File a final tax return … Continue reading

Cost of reporting FHSA in the US

Hi Ivan, Thank you for reaching out! Given your FHSA (First Home Savings Account) and your U.S. tax obligations, here are a few key considerations: 1. Reporting FHSA in the U.S. The U.S. does not recognize the FHSA as a tax-deferred account, which means: ✔ Any income (such as GIC interest) earned within the FHSA … Continue reading

work as an intern in the uS

Hi, You should file Form 1040NR (Non-Resident Alien Income Tax Return) to report your U.S. income, even if your employer withheld the correct amount of tax. The filing deadline is April 15, 2025. As a Canadian tax resident, you’re required to report your worldwide income, including any foreign income earned in the U.S., on your … Continue reading

Signing a lease as a non-resident

Hi Michele, You will continue to be a resident of Canada if you sign a lease agreement with your son to rent an apartment/home in Canada. A home in Canada available for your use is a primary tie to Canada.

My tax software shows two tax balances owing – Federal and Provincial. I assume I add these together for putting in line (9990)?

Hi Jonny, Record the current income tax expense (federal + provincial) on GIFI code 9990. Note that the corporate income tax payable can be different from the income tax expense if you made installment payments during the year

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