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Leaving Canada and Cross border planning.

1. Maintaining Non-Resident Status in Canada Yes, it’s possible to maintain non-resident status in Canada if you have no primary residential ties (e.g., no spouse or children in Canada, no significant property, etc.). However, secondary ties (e.g., rental property, bank accounts, visits) can be scrutinized. If you’re a non-resident, your non-Canadian income (like from the … Continue reading Leaving Canada and Cross border planning.

Sale of Vacation home in US and tax Implications

Hi Randy, Since the property was never rented out and is not connected with a business or trade, the gain from the sale would not be treated as effectively connected income with a U.S. trade or business. It would typically be reported on Schedule D (Form 1040NR) instead of Form 4797, as it is considered … Continue reading Sale of Vacation home in US and tax Implications

FICA witholding for non-resident aliens after 2 years of presnse in the US

Hi Max, You’re correct that J-1 visa holders (trainees) may remain exempt from FICA taxes if they continue to qualify as non-resident aliens (NRAs) under the U.S.-Canada tax treaty, even after the two-year period generally used to determine the Substantial Presence Test (SPT). As you pointed out, the key factor is the treaty-based position, which … Continue reading FICA witholding for non-resident aliens after 2 years of presnse in the US

US tax for TN status Holders

Hi Ron, The first step is to determine if you and your wife meet the US Substantial Presence Test (SPT). If you meet the US SPT, you will be treated as resident aliens for tax purposes and must file a dual-status return with the IRS. If you do not meet the US SPT requirement, you … Continue reading US tax for TN status Holders

withholding taxes

Hi Sam, Business profits derived by a foreign corporation through a permanent establishment located outside Canada are not taxable in Canada. However, dividends paid by a Canadian corporation to a non-resident of Canada are not exempt from withholding taxes.

new fMV on stocks to lower departure tax

Hi Michele, Most foreign countries do not recognize TFSAs as tax-sheltered investments. This means that any gains or income realized within a TFSA is taxable in the foreign jurisdiction. As a result, there’s no real benefit in keeping a TFSA if you are a non-resident of Canada, unless your new home country either recognizes the … Continue reading new fMV on stocks to lower departure tax

Tax Form for Nonresident Canadian with Canada-sourced T4 income

Hi Byron, File form 5013-R Income Tax and Benefit Return for Non-Residents and Deemed Residents of Canada. In addition to this, complete form 5013-SA Schedule A – Statement of World Income (for non-residents and deemed residents of Canada). If more than 90% of your global income is from Canadian sources, you will be eligible for … Continue reading Tax Form for Nonresident Canadian with Canada-sourced T4 income

How To avoid double tax issue When investing in the us as a canadiam

Yes, you will be double taxed. This is because the IRS treats a multi-member LLC as a Partnership whereas the CRA treats an LLC as a corporation. The CRA will tax distributions received by you from the LLC and the foreign tax credit allowed will be limited to 15% of the distributions received. Consider transferring … Continue reading How To avoid double tax issue When investing in the us as a canadiam

exclusion property of departure tax

Living outside Canada for 60 months does not mean you will qualify for the exemption from departure tax. To qualify, you must leave Canada within 60 months of your arrival. For example, suppose you became a tax resident of Canada on January 1, 2020. You would need to leave Canada before December 31, 2024 to … Continue reading exclusion property of departure tax

TFSA, FHSA, RRSP implications for a canadian citizen relocating to US under work visa

Hi Vik, Generally speaking, if your primary source of income is from the US, it’s better to be classified as a tax resident of the US and a non-resident of Canada. This is because the US has lower tax rates on most sources of income than Canada. If you have no primary ties to Canada … Continue reading TFSA, FHSA, RRSP implications for a canadian citizen relocating to US under work visa

utilising LTCG On Housing Property

Hi Raju, You cannot use the lifetime capital gains exemption toward the sale of real estate. The exemption is available to sellers of Qualified Small Business Corporation shares.

Capital gains

The CRA will treat the sale of stocks and bonds as capital gains income unless you are a day trader, in which case the income will be treated as fully taxable business income.

Lower Departure Tax

Hi Michele, Departure tax does not apply to Tax Free Savings Accounts (TFSAs). Therefore, you don’t need to sell your investments held in a TFSA to reduce departure tax. In addition, your TFSA can continue to grow tax-free while you are a non-resident. TFSA withdrawals made by a non-resident are not subject to a withholding … Continue reading Lower Departure Tax

Tax Implications of Canadian Bank Accounts for non-Resident Canadians in U.S.

Hi Vinod, You need to complete the US FBAR if the total amount of all foreign accounts exceeds $10,000 USD at any time in the year. In addition, provide form NR301 (available for download from the CRA’s website) to the bank so they can issue a non-resident reporting slip for interest paid to you.

foreign sole proprietorship income?

Hi David, If you intend to live in Canada permanently and are therefore considered a factual resident of Canada, you must pay tax to the CRA on your global income. Complete form T2125 to report your foreign business income and expenses and Form T2209 (foreign tax credit) to report foreign taxes paid. Attach these forms … Continue reading foreign sole proprietorship income?

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