Understanding taxation requirements between Canada and USA is an important aspect before a Canadian citizen or a Canadian resident baying a residential property in the United States. If you are resident of Canada for tax purposes, you are required to report your worldwide income on your Canadian income tax return.
Furthermore, you may also require to report your foreign properties on your Canadian income tax return to avoid $2,500.00 penalty. When you report any income from the United States on your Canadian tax return, you may also want to ensure that the issues of double taxation is avoided.
It is also important to note that between Canada and USA, there is a tax treaty to avoid double taxation issues. You should seek professional advise in this regard to find out the tax consequences in your particular situation.
Please follow the link for further details:
The above discussions are based on the most common situations and have been discussed for a general understanding. Your specific situation may be differing. For example if a Canadian resident having Social Security Number in the United States or a dual citizen may choose a different option. In some cases your purpose of investment should also be looked into.
Disclaimer: Information in the blog/post/article has been presented for a broad and simple understanding. This is not legal advice. RKB Accounting & Tax Services does not accept any liability for its application in any real situations. You need to contact your accountant or us for further information.