Sale of Canadian rental property by US citizen

[bgiez]

Hello, All,

My US citizen client sold her Canadian property at a gain. Does she need to file a Canadian return?

Thanks for any input.
bgiez

[BOB W]

Yes...

.. any foreign tax paid will be a tax credit on 1116 . The profit needs to be reported on US Federal as well as the resident State tax returns..

Question, hasn't this property been reported in the past are rental income property both in Canada and the US? I fear not, since the question was asked about the sale.

[bgiez]

Thanks, Bob.

The rental losses have been reported on the US return since the beginning, and the client had been advised to check with her contacts in Canada about whether a Canadian return was required. There has not been any profit on the rental until the sale.

Does it make any difference if the rental is sort of like a condo, as the land on which it sits is not owned by the taxpayer? It's just the structure that had been sold.

Any idea where to send her for the Canadian return?

bgiez

[BOB W]

Call...............

...........her Canadian contact and supply that person with the sale details. Be sure to include all loss years that may qualify for "suspended losses" and/or "NOL carryover" issues so basis adjustment can be used to offset gain on sale in Canada.