Canada Tax Help

[TAX4US]

Help. TP is a US citizen all his life. TP inherits land in Canada. TP wants to sell land and has a contract from Canadian business who wants to buy. Here is the catch.

1: Does tp need to get a ITN number for Canada? Form T1261?

2: Is basis on Canadian land the same as US land when inherited?

3: Is TP required to file a Canadian Tax Return?

4: Would there be a Canadian tax withheld at closing and paid over to Canada under the above stated # (itn)?

5:Would the sale proceeds be handled through the Estate of or would they go directly to the TP who inherited?

6: Is there an exemption from Canada Tax where US tp pays in US?

7: How to correctly fill out form T2062A?

8: Does tp need to get IRS form 6166?

If you can help me with this, email me direct with name and a phone # for contact

Thanks for the help.

[Nashville]

We have a source

One of the people who posts on this forum claims to have expertise in Canadian-US tax preparation. He posts under the name of "Uncle" and his name is Christopher Mewhort and has an address in Hawaii. You might see if he can help.

He will post if he visits the forum, but not everyone visits the forum every day.

He has given us a phone #808-261-0005.

[Uncle]

Let me correct my phone number!

My correct office phone number is 808-261-5005. Thanks.

[Uncle]

This gets complicated real fast

Help. TP is a US citizen all his life. TP inherits land in Canada. TP wants to sell land and has a contract from Canadian business who wants to buy. Here is the catch.

1: Does tp need to get a ITN number for Canada? Form T1261?

2: Is basis on Canadian land the same as US land when inherited?

3: Is TP required to file a Canadian Tax Return?

4: Would there be a Canadian tax withheld at closing and paid over to Canada under the above stated # (itn)?

5:Would the sale proceeds be handled through the Estate of or would they go directly to the TP who inherited?

6: Is there an exemption from Canada Tax where US tp pays in US?

7: How to correctly fill out form T2062A?

8: Does tp need to get IRS form 6166?

If you can help me with this, email me direct with name and a phone # for contact

Thanks for the help.

There is not enough information in this posting to give any sort of detailed reply. I will try and help in very general terms. Canada does tax capital gains. Canada (or CRA, the Canadian Revenue Agency) enforces Canadian rules and regulations. CRA does not care if you are a US citizen or not.

Assuming that the property in Canada is real property, and that your client is a Canadian non-resident (there are different kinds of Canadian resident(!)), the following may apply: Yes, if you do not have a Canadian tax number, use Form T1261 to obtain one asap. Make sure the people handling the sale understand you are a non-resident. If the former owner of the property was an individual, they would have had a deemed disposition of the property upon death. They would have paid tax on any capital gain on their final tax return. You client should then inherit the property with an adjusted cost base (basis in IRS speak) of value upon date of death. Make sure your client informs CRA of the sale within 10 days of the sale. Your client then files the correct Canadian tax return and pays the appropriate tax. This sale is also reported on Schedule D of Form 1040, of course, and perhaps some or all of the Canadian tax paid can be recovered as a foreign tax credit.

This is not a simple question and I apologize if my very brief reply makes it sound easy or simple.