# Selling property question



## DebL22 (Jan 15, 2017)

I have a question. Are we considered a foreign entity when selling US property, while living in Canada?
We have a very small property we wish to sell...under $100 K.

[About Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities]

I read it, but can't understand.

Thank you for any help.


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## NickZ (Jun 26, 2009)

You should likely ask in the US forum. I assume that's an IRS publication?


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## DebL22 (Jan 15, 2017)

NickZ said:


> You should likely ask in the US forum. I assume that's an IRS publication?


Thank you. Where can I find that forum?


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## Bevdeforges (Nov 16, 2007)

Hang in here for a bit - but if you don't get any responses I'll move this thread to the US forum. In essence the Expat Tax section was established primarily because of the US notion of "citizenship based taxation" which can quickly become a real hassle for US citizens living outside the US. 

The first question I would have for the OP (DebL22 - that means you <g>) is: are you a US citizen and thus subject to US taxes? If you aren't a US taxpayer, then you are subject to the NR (non-resident) tax rules. But if you are a "US person" (i.e. citizen or long-term resident) currently living in Canada, then you play the gave under the normal US resident rules. Basically, a US citizen is always considered to be a US resident for tax purposes, no matter where they may live in the world.


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## 255 (Sep 8, 2018)

DebL22 -- Your question: "Are we considered a foreign entity when selling US property, while living in Canada?" No, an foreign entity is a company, of some sort, established under another jurisdiction. So, unless the property in question is held (owned) by an "out of state"/country company/trust, etc. -- it is not owned by a foreign entity. If you own the property personally (or jointly, with family for instance,) you are not an entity. Cheers, 255


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## DebL22 (Jan 15, 2017)

Bevdeforges said:


> Hang in here for a bit - but if you don't get any responses I'll move this thread to the US forum. In essence the Expat Tax section was established primarily because of the US notion of "citizenship based taxation" which can quickly become a real hassle for US citizens living outside the US.
> 
> The first question I would have for the OP (DebL22 - that means you <g>) is: are you a US citizen and thus subject to US taxes? If you aren't a US taxpayer, then you are subject to the NR (non-resident) tax rules. But if you are a "US person" (i.e. citizen or long-term resident) currently living in Canada, then you play the gave under the normal US resident rules. Basically, a US citizen is always considered to be a US resident for tax purposes, no matter where they may live in the world.


Thanks Bev, Are you absolutely sure of this? We are US citizens (who keep up on our tax reporting), also have Dual/Canadian. My accountant seems to think we will still be considered non-residents. But this is the answer we are hoping for! 
Thank you so much!


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## DebL22 (Jan 15, 2017)

Hi Bev, Is there somewhere I can see that documented? I would like to have the proof for my accountant and for the people handling the sale. 
It's what we are hoping for!!
Thanks so much.


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## Moulard (Feb 3, 2017)

DebL22 said:


> Is there somewhere I can see that documented?


 I.R.C. § 7701(a)(30) defines a US person as, amongst other things, a citizen or resident of the United States.

This effectively means that a US citizen is taxed the same as a resident of the United States by virtue of citizenship.


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## Bevdeforges (Nov 16, 2007)

Take a look at IRS Publication 54 - Chapter 1 under the heading Filing Requirements:


> If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and for paying estimated tax are generally the same whether you are in the United States or abroad.


There are other references to this in Pub 54 - and I would be wary of a tax preparer who is unfamiliar with Pub 54.

Or take a look at this page from the IRS website: Taxpayers Living Abroad | Internal Revenue Service


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## DebL22 (Jan 15, 2017)

Bevdeforges said:


> Take a look at IRS Publication 54 - Chapter 1 under the heading Filing Requirements:
> 
> There are other references to this in Pub 54 - and I would be wary of a tax preparer who is unfamiliar with Pub 54.
> 
> Or take a look at this page from the IRS website: Taxpayers Living Abroad | Internal Revenue Service


Thank you. It does seem that the Publication 515 is contradicting these statements. But if a citizen is considered a 'resident' then that clears us, I believe. Just too much for my mind to wade through.


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## Bevdeforges (Nov 16, 2007)

Not sure why you're being referred to Pub 515. What you need for those who file NR forms is here: Taxation of Nonresident Aliens | Internal Revenue Service

Just a little point to raise with your tax preparer might be that if you file a 1040-NR, your tax rate is a flat 30% for most things. Most banks and other financial institutions are required to withhold at the 30% rate for anyone who hasn't produced a form W-9 declaring themselves to be "US persons" subject to resident taxation. Generally speaking you'll be required to file a W8-BEN as a non-resident alien if you live outside the US and are receiving some form of income from the US. (But you file either a W-9 or a W8-BEN with the financial institution only. It does not go to the IRS. It is for the protection of the financial institution.)


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## DebL22 (Jan 15, 2017)

Bevdeforges said:


> Not sure why you're being referred to Pub 515. What you need for those who file NR forms is here: Taxation of Nonresident Aliens | Internal Revenue Service
> 
> Just a little point to raise with your tax preparer might be that if you file a 1040-NR, your tax rate is a flat 30% for most things. Most banks and other financial institutions are required to withhold at the 30% rate for anyone who hasn't produced a form W-9 declaring themselves to be "US persons" subject to resident taxation. Generally speaking you'll be required to file a W8-BEN as a non-resident alien if you live outside the US and are receiving some form of income from the US. (But you file either a W-9 or a W8-BEN with the financial institution only. It does not go to the IRS. It is for the protection of the financial institution.)


OK. To clarify, it is concerning:
8288-B (Rev. February 2016) Application for Withholding Certificate for Dispositions by Foreign Persons of U.S. Real Property Interests
8288b
This sounds like a person from US could be a foreign person also?


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## 255 (Sep 8, 2018)

DebL22 -- Your statement: "We are US citizens" indicates that you are required to file form 1040, not 1040-NR, which is used for "non-resident aliens." This is not that difficult. From your statements, it appears you should "fire" your accountant ASAP! There are tons of competent tax preparers out there, for you to choose. Cheers, 255


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## DebL22 (Jan 15, 2017)

255 said:


> DebL22 -- Your statement: "We are US citizens" indicates that you are required to file form 1040, not 1040-NR, which is used for "non-resident aliens." This is not that difficult. From your statements, it appears you should "fire" your accountant ASAP! There are tons of competent tax preparers out there, for you to choose. Cheers, 255





255 said:


> DebL22 -- Your statement: "We are US citizens" indicates that you are required to file form 1040, not 1040-NR, which is used for "non-resident aliens." This is not that difficult. From your statements, it appears you should "fire" your accountant ASAP! There are tons of competent tax preparers out there, for you to choose. Cheers, 255


We do file 1040's...this is a separate issue with 8288b


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## 255 (Sep 8, 2018)

DebL22 -- IRS form 8288-B is used by "foreign persons," not U.S citizens. About Form 8288-B, Application for Withholding Certificate for Dispositions by Foreign Persons of U.S. Real Property Interests | Internal Revenue Service (irs.gov) Cheers, 255


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