Answers Archive

do i need to pay tax from interst I earn from GIC when i am not a canada citizen nor residence

Hi Andrew, Interest payments made by a non-arms-length person/entity (including a financial institution) to a non-resident of Canada are not subject to a non-resident withholding tax. In other words, the interest income received is not taxable in Canada.

Non-resident spouse came back to Canada for 5 months

Hi Zeeshan, Report the actual rent collected in the year and the taxes remitted based on the rent collection. Expenses for the whole year can be deducted if you make reasonable efforts to rent the unit.

oas received in Portugal?

Hi David, As a non-resident of Canada, you can receive OAS payments so long as you resided in Canada for at least 20 years starting from age 18.

Non-Resident with Canadian Rental Property

Hi There, A spousal rollover is not available for non-residents and so your spouse’s death will result in a deemed disposition of the property to the extent of your spouse’s ownership interest. If your spouse owned 50% of the property at the time of her death and the total gain is $800,000, then her share … Continue reading

CEBA loan Tax Treatment

Hi Jignesh, The forgivable portion of the loan is taxable in the year that the loan is received. A tax deduction of the forgivable portion is allowed in the year that the loan is repaid. The fee to prepare a corporate tax return is $1,650.

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.

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