Income Taxes on the Sale of U.S. Property in Canada - PowerPoint PPT Presentation

About This Presentation
Title:

Income Taxes on the Sale of U.S. Property in Canada

Description:

Maroof HS CPA Professional corporation is an IRS Certifying acceptance agent located conveniently in Greater Toronto Area in Canada. Further, cross border tax expertise help with the correct preparation of U.S. income tax returns. More info visit – PowerPoint PPT presentation

Number of Views:26

less

Transcript and Presenter's Notes

Title: Income Taxes on the Sale of U.S. Property in Canada


1
Income Taxes on the Sale of U.S. Property in
Canada
https//www.maroofhs.com/post/cross-border-tax-iss
ues-for-canadian-taxpayers-selling-us-property/
2
Canadians love the warm weather of Florida and
California. This is the reason lot of Canadians
do own the properties in the U.S. If they are not
living there, they are holding it for investment
purposes. There are many income tax issues
Canadians should b aware of while selling their
U.S. properties. For a detailed information on
the tax issues involved with sale of U.S.
properties, read here. Under Foreign
Investment in Real Property Tax Act aka FIRTPA,
the buyers are required to withhold 15 of the
sale price and remit to IRS. There are exception
involved, for more details refer to the link
mentioned above. A U.S. ITIN also known as US
TIN or individual income tax number is needed
whenever a US property is sold to ensure
withholding taxes are credited to right account
by the IRS. An ITIN is also needed when the
seller want a reduced withholding rate. Seller
must file a U.S. federal tax return. For this
purpose form 1040NR is used to report gain or
loss. FIRTPA withholding is netted off with the
final tax amount to calculate tax payable or a
refund.
3
Correct preparation and submission of form W7
is critical in the whole process. Its important
that you read all the instructions to avoid
wastage of time and back and forth with IRS. If
you find the instructions overwhelming use the
services of a Certifying acceptance agent near
you. Canadian notaries or lawyers cannot certify
your documents. The gain or loss is also
reported to Canada Revenue Agency in Canada. The
taxes paid in the U.S. become foreign tax credit
so only the difference is paid. Foreign tax
credit does not create a refund in Canada. So you
pay the higher of taxes in US or Canada on
property sale. If you dont file your tax
returns in the U.S., you cannot get foreign tax
credit in Canada even if you are having form
8288-A stamped by the IRS. Maroof HS CPA
Professional corporation is an IRS Certifying
acceptance agent located conveniently in Greater
Toronto Area in Canada. Further, cross border tax
expertise help with the correct preparation of
U.S. income tax returns.
4
You can reach us at 3-100 Hanlan Road,
Woodbridge, ON L4L 4V8 Phone (647)724-4308 Emai
l Canada_at_MaroofHS.com https//www.maroofhs.com/c
ontact/ https//twitter.com/MaroofHS https//www
.facebook.com/MaroofHSCPA
Write a Comment
User Comments (0)
About PowerShow.com