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| *Ostroff, Fair and Company>>>Canada Taxes |
If I purchase a house in the state of california do I have to pay Canadian Capitol Gains Tax on that property? |
If I purchase a house in the state of california do I have to pay Canadian Capitol Gains Tax on that property? Yes, all capital gains have to be declared if you are subjected to Canadian taxes. You would also be subjected to U.S. withholding tax. Only when you sell. this Q needs more input. first, if you are not required to file a Canadian tax return, then NO. second, if you are required to file, you will only pay 'Capital Gains Tax' if you have taxable income after accounting for a GAIN on your sale -- which will not happen until the year in which you sell your house. when this happens, if you have a taxable capital gain ((difference between selling price and (purchase price + all costs and outlays + capital improvements)) you will report one-half of the gain as income on your Canadian return. You still may not owe tax given income, deductions, tax credits etc. If you do have to pay tax, it will only be on half the gain however. If you are a resident of Canada then the sale will be subject to US non-residents tax. You claim the capital gains on your Canadian return but due to a tax reciprocity agreement between the US and Canada, the amount of tax paid to the IRS is considered tax paid by the CCRA. Your Canadian tax liability should be little or none....you might even get a rebate. |
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