Will owning a home in Canada affect our taxes after he moves?

[dkunkle 2]

My husband is Canadian. We just submitted his visa application and are now waiting for his interview which will be scheduled in Vancouver after they review his application and my affidavit of support. We hope he'll be able to move here by summer or fall. He is upside down on his home because of the slump in the housing market, and if we sell it, we'll need to come up with about $50K to get out of it. It would not be good for us financially.

I've started researching about how it might affect us if we rented it out. It seems that him still owning a home in Canada might make him be considered still a resident of Canada for tax purposes, even though he would be working and earning money only in the U.S. as a permanent resident here. What does that mean exactly? Surely other people have had to consider renting rather than selling their home after moving to the U.S, and I just want to make sure we don't make a bigger mistake. He would have no other property or bank accounts in Canada. We would use a property management company, and it looks like we would owe 25% of the net rental income to Canada in taxes. We can swing that.

Any advice, comments or thoughts here would be most appreciated. Or referrals to a tax expert that deals with cross-border tax filing.

Thank you.

[cdneh 3,112]

I believe the only place in Canada that does spousal interviews is Montreal.

[dkunkle 2]

I could be wrong, but i have read elsewhere on this site that the NVC ID number we were given indicates either Vancouver or Montreal, and ours has the Vancouver code. However, no matter if he interviews in Montreal. That really doesn't affect the question I'm asking, which is does anyone know if him keeping his residence in Canada and renting it out after he moves, will affect his taxes on income he earns after moves.

[NikLR 13,227]

I could be wrong, but i have read elsewhere on this site that the NVC ID number we were given indicates either Vancouver or Montreal, and ours has the Vancouver code. However, no matter if he interviews in Montreal. That really doesn't affect the question I'm asking, which is does anyone know if him keeping his residence in Canada and renting it out after he moves, will affect his taxes on income he earns after moves.

That's really odd that he has a VAC code because normally ONLY Montreal does immigrant visa interviews. Did you perhaps file for a K3?

Yes having a home in Canada affects his US and Canadian taxes.

Even if he sells the home after becoming a US resident it would affect both taxes.

Even if he sells the home after becoming a US resident it would affect both taxes.

[dkunkle 2]

I guess I'm wondering how i determine the best way to go.... sell the home and take the loss, or rent the home. Trying to prevent double taxation of course.

[Nich-Nick 3,354]

I guess I'm wondering how i determine the best way to go.... sell the home and take the loss, or rent the home. Trying to prevent double taxation of course.

There are tax treaties in place which are supposed to protect you from paying taxes on the same money to two countries. I have never read the US/Canada treaty so of no help there. This IRS publication might help, but I don't think it is detailed enough to answer your question. https://www.irs.gov/pub/irs-pdf/p597.pdf

I understand you are looking for strategies, but diving into the actual long treaty might give you some insight.

An example that doesn't necessarily apply to you but shows you how strategy helps is the US/UK situation. A home sold in the UK is not taxed on the gain if it sells for more than paid for it. In the US, the gain or profit is taxed. So selling before moving to avoid the tax on gain might help. Generally you only follow the tax laws of the country where you are living....like claim the rental income on your 2016 US tax return. But Canada might have special circumstances where they still require you to pay Canadian tax on certain incomes, despite living in the US and filing a US tax return. That publication link touches on that a bit. Wish I could help more, but I know nothing about Canada. Is there a Canadian forum where you might find more knowledgeable Canadians? Or a Candian expat website with some tax gurus helping?

[dkunkle 2]

Good idea - I'll ask this question in the Canada forum too.

[Pitaya 2,577]

~Moved from Tax & Finances During US Immigration Forum to Canada Regional Forum~

~OP intent, secondary posting removed~

Edited January 10, 2016 by Pitaya

[Lemonslice 4,843]

I still own real estate in Canada; I also pay Canadian taxes, but this has more to do with my employer than the real estate.

Taxes regulations are even more complicated than immigration (!) You are in a situation where it might be totally worth it to consult with an international tax accountant to compare the cost of keeping the home and selling it later, selling it now at loss - or they might even have other scenarios that would make the the most sense for you.

You could also try to post on the Serbinski forums to get a better answers.

[oncefuturealien 45]

I still own real estate in Canada; I also pay Canadian taxes, but this has more to do with my employer than the real estate.

Taxes regulations are even more complicated than immigration (!) You are in a situation where it might be totally worth it to consult with an international tax accountant to compare the cost of keeping the home and selling it later, selling it now at loss - or they might even have other scenarios that would make the the most sense for you.

You could also try to post on the Serbinski forums to get a better answers.

Hey Boston-Montreal, do you still work for your Canadian employer/get paid in Canada? how does that work? (my employer and I are trying to figure out the best/easiest way for me to keep working for them ad hoc after I move at the end of the month I hope).

[NikLR 13,227]

I still own real estate in Canada; I also pay Canadian taxes, but this has more to do with my employer than the real estate.

Taxes regulations are even more complicated than immigration (!) You are in a situation where it might be totally worth it to consult with an international tax accountant to compare the cost of keeping the home and selling it later, selling it now at loss - or they might even have other scenarios that would make the the most sense for you.

You could also try to post on the Serbinski forums to get a better answers.

This is your best bet for specific answers. The site is ran by accountants who specialize in Canada/US taxes so if need be the OP can employ them to help with their taxes, at least the first year.

[Lemonslice 4,843]

Hey Boston-Montreal, do you still work for your Canadian employer/get paid in Canada?

Different (Canadian) employer and I am paid in US dollars in the US... can't really help you, sorry.

[oncefuturealien 45]

Different (Canadian) employer and I am paid in US dollars in the US... can't really help you, sorry.

OK thanks

[dkunkle 2]

The Serbinski website was one I saw that did the cross border tax stuff. I didn't know they had a forum. I'll go find it and check it out. Thank you!