Answers Archive

Income tax while working in USA

Hi there, Generally speaking, if you move to the US on a permanent basis and maintain no primary ties to Canada (house available for your personal use, children, spouse), then you are a non-resident of Canada and a resident of the US. As a non-resident of Canada, you must pay a non-resident tax equal to … Continue reading

Repatriation

Hi Sandy, Prepare a gift letter, signed by both you and your parents, stipulating that the amount is a gift. Keep the gift letter for your records in case the CRA asks for verification of the source of the gifted funds. If the money is held in a foreign bank account belonging to you, then … Continue reading

change in use of principal residence

Hi Sammad, The 45(2) election must be filed for the year in which the change in use of the property occurs. My understanding is that the CRA will not accept a 45(2) election that is filed past the due date.

Gift from Parents in India

Hi Krithi, From a Canadian perspective, you do not have to pay income tax on the gift received. If your parents are non-residents of Canada, they also have no tax payable to the CRA on the sale of the property. Note: your parents will likely owe Capital gains tax to the Indian taxation authorities.

Gifting Corporation owned Real Estate to a Relative/ Non-Relative

Hi Paul, When a taxpayer makes a gift of property / shares, the taxpayer is deemed to have ‘sold’ the property / shares for their fair market value at that time. This can trigger a capital gain. It does not matter if the recipient of the property / shares is a relative or a third … Continue reading

GIFI code for car/Mileage expenses

Report the mileage expense on GIFI code 9281 (vehicle expenses).

Canadian on TN Visa recent mover

If you moved to the US on a permanent basis (TN visas are renewable) and you do not have a house, spouse, or children in Canada, then you became a non-resident of Canada as of the date of your departure from Canada. File a Final Canadian Tax Return (i.e. a departure return) with the CRA. … Continue reading

US rental property -owned jointly – filing 1040nr

You each have to file a separate US 1040-NR return with Schedule E. Divide the income and expenses on a 50/50 basis.

Dual American-Canadian citizen temporarily in Canada

If you resided in Canada for less than 6 months, and your employer does not have a fixed place of business in Canada and the salary was not charged back to a Canadian subsidiary of the US employer, you do not have to pay tax in Canada on your US employment income. This is according … Continue reading

Claiming child care (Higher earner)

If you were separated and you kept the children, you can deduct eligible child care expenses on your tax return. After you reconcile, the lower income spouse must claim child care costs.

Filing return as emigrant /non-resident

Please file a T1 general return and specify the date of emigration on the return (April 2022). In addition, contact Service Canada to inform them that you became a non-resident of Canada in April 2022, so that they begin deducting non-resident withholding tax from CPP and OAS payments made to you.

would I have to hire a real estate agent to transfer a house from corporate ownership to personal ownership?

You do not need to hire a realtor. A lawyer can complete the sales transaction for you.

deemed disposition of rental building

Hire a certified appraiser to determine the breakdown of the selling price between land and building. Or you can ask this information from your realtor. The City Assessment is not reflective of fair market value, and should not be used.

How to avoid double taxation with India

As you correctly pointed out, India’s tax year is different from Canada and ends on March 31, 2023. Until the Indian return is filed and a tax assessment received, enter an estimated amount of Indian income and Indian tax paid on your Canadian tax return. Once the Indian return is filed and assessed, you will … Continue reading

How to Report Capital Gains Distributions from REIT on T2

Report capital gains distributions on Schedule 6 of the T2 corporate tax return.

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