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Tag Archives: US tax
Canadian Receiving Rental Income From U.S. Real Property
Foreign Property Owner’s Tax Return Responsibility During Ownership and Rental of Real Property Interest
First the Canadian owner of US Real Property needs to determine whether the rental income will be taxed as investment income through withholding, or on a net income basis as “ effectively connected with a U.S. trade or business,” without withholding (although the owner may have to file estimated tax returns). Rental income from real property located in the United States
A Tax Guide for Canadians Buying US Property
If you are a Canadian resident intending to buy a residential property in the United States it is important that you are aware of the following tax implications particularly if you intend to rent it for any period of time during the year.
A non-US resident owning a US residential rental property may elect either of the following options:
OPTION ONE: ELECT TO PAY TAX EQUAL TO 30% OF THE GROSS RENTAL REVENUE
This option makes little economic sense.
Option TWO: Elect TO HAVE RENTAL INCOME TAXED ON A RENTAL PROFIT BASIS
In order to avoid the 30% gross revenue tax on your US property you must file form W8-ECI (Certificate
Personal vs Company Owned U.S. Real Estate Investment Properties
U.S. investment property is usually defined as real estate that is primarily purchased to buy and sell for a profit in the future or to produce rental income. However, there are several factors to take into account when deciding to purchase an investment property. Understanding the many components of investment property ownership can avoid a lot of headaches down the road. Many investors with real estate investment properties own them personally. A more prudent way to own real
How to Avoid Paying Back Depreciation on a U.S. Rental Property
While you can claim many expenses as write offs in the year you make them, the IRS treats buying a rental property not as an expense but as a conversion — In other words, you’re turning cash into an asset with value, meaning that no net change to your personal wealth has occurred. However, since buildings gradually wear out, the IRS lets you depreciate it by taking a small portion of value as an expense every year, writing down its value and reducing your taxes. With something like a computer
Canadian Residents for U.S. Income Tax Return
What are the basic requirements for U.S. income tax return for Canadian residents (non-residents of U.S.) who conduct business in the U.S., such as providing self employed personal services or have a rental income in the U.S. ?
As a U.S. non-residents who are taxable in the U.S. on their U.S. source income must file form 1040 NR by June 15 each year for the prior calendar year. Married residents of Canada may claim exemptions for a spouse and dependent children who lived with them. Although