If you are a Canadian resident, but living or working in US or have US rental property:
- Avoid becoming a US resident while visiting
- If you own rental real estate in the U.S., elect the net rental income method
- Beware of high effective tax rates when considering an investment in a U.S. limited liability corporation
- Sell real estate to a buyer who will occupy it as a residence
- Apply for a U.S. “withholding certificate” on the sale of real estate
- Be cautious when acquiring share in U.S. corporations
- Leave property to your spouse or a qualified domestic trust
- Mortgage property (non-recourse) to reduce the value of your U.S. real estate
- Acquire property jointly with your spouse or another person
- Split your worldwide assets with your spouse
- Consider a split interest purchase with your child
- Hold your U.S. property through a Canada corporation
- Hold your U.S. assets through a Canada partnership that elects to be treated as a corporation in the U.S.
- Sell U.S. property before death
- Consider taking out life insurance to cover U.S. estate taxes
If you are a US resident, but living or working in Canada or have Canadian rental property:
- Consider claiming the foreign earned income exclusion
- Claim the maximum foreign tax credit
- Keep records of expenses deductible on your U.S. return
- Beware of differences between Canadian and U.S. rules governing retirement income
- Elect to defer U.S. taxation of income accruing in your RRSP and other Canadian retirement plans
- Beware of non-qualified deferred compensation plans
- Watch our for ownership of Canadian corporations earning passive income
- Be cautious of using the Cdn$750,000 capital gains exemption
- Review income splitting arrangements to prevent double taxation
- If you are married, file a joint return where appropriate
- Consider using the annual $12,000 U.S. gift tax exclusion to transfer wealth to children and grandchildren
- Beware of U.S. gift and foreign trust reporting rules
- Consider expatriating from the U.S. to protect your Canadian assets from U.S. tax
- Watch our for short-term visits to the U.S. following expatriation
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