# property in Canada have moved to US



## taxquestion (Jan 6, 2013)

Hello

I moved back to US at 2012, I've been doing a lot of research about this but I would like to get a second opinion just to be sure. Here is some details about my situation

When I was in Canada my parents changed the house to my name and they are living in it. I don't plan to move back to Canada and apparently with the tax treaty between US and Canada I can still become a non-resident for taxes in Canada even though I have some ties there including property. Is that correct?

Also what will happen if my parents decide to sell the house? would I have to pay any taxes on it? like dividends? I was told I do not have to, but I like to be sure about this.

Thank You


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## Bevdeforges (Nov 16, 2007)

OK - if you're living and working in the US then you're considered tax resident there. I'm not sure how Canada does these things, but as long as you're not living in Canada and spend most of your time physically present in the US, you should be "non-resident" for tax purposes as far as the Canadians are concerned.

Now, are your parents paying you any sort of rent on the house? Because if they are, you need to declare this on your US income taxes. (And you get to deduct any taxes or other expenses you pay on the upkeep of the house if you are receiving the rent from it.)

If the house is in your name and your name only, your parents can't sell it without your consent. And if you sell it, you may wind up having to declare (and possibly pay) the profit from the sale on your US taxes. This is the tricky bit, because if your parents just changed the name on the property without any money changing hands, you may be looking at having 0 basis in the property so that you'd have to report the entire sales price as "profit." And, your parents would lose the benefit of any "sale of a personal residence" provisions in Canadian tax law.

You may want to look a bit closer into exactly how and why your parents changed the house to your name to make sure you understand the transaction. If they gifted the house to you, there may be gift and inheritance tax things to take into consideration.
Cheers,
Bev


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## taxquestion (Jan 6, 2013)

Bevdeforges said:


> OK - if you're living and working in the US then you're considered tax resident there. I'm not sure how Canada does these things, but as long as you're not living in Canada and spend most of your time physically present in the US, you should be "non-resident" for tax purposes as far as the Canadians are concerned.
> 
> Now, are your parents paying you any sort of rent on the house? Because if they are, you need to declare this on your US income taxes. (And you get to deduct any taxes or other expenses you pay on the upkeep of the house if you are receiving the rent from it.)
> 
> ...


Thank you got your reply

99% of the house is under my name, and they are still paying mortgage on the house. If they decide to move to another house will I still have to pay inheritance tax? Or will I have to pay it when I get the money? What about of I change the title to another family member?


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## Bevdeforges (Nov 16, 2007)

If the house is currently in your name, you will have to declare the capital gain on the sale of the property if the house is sold. Whether or not you have to pay depends on a number of factors (including what taxes you would have to pay to Canada on the sale of the property).

There's also the question of whether or not you should be declaring your parents' payment of the mortgage as "rental income" since the property is in your name now and not theirs.
Cheers,
Bev


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## robnw (Jul 18, 2012)

Another consideration is that under the US Canada tax treaty the Canadians will want to tax you on the gain on the sale of the house first. See a US Canadian planner: possibly, they'll suggest unwinding the gift and trying to achieve your parents' wishes another way. Brian Wruk or Dale Walters are suitable advisors.


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