BIRD TALK

Hello. I do enjoy reading “Bird Talk.” However, as a retired CPA, I do shudder at times with your advice regarding transfers of U.S. property to children or sales to outside parties. I am not an expert on U.S. tax rules or any differences between houses on leased land versus freehold properties. I do know for certain that the CRA will be looking for taxes on gains on either property when sold or when gifted to children. I have written to you about this in the past but received no answer. I would appreciate a response, even if you do not wish to publish this.

Thank you,

Dennis Zinger
Elora ON.

Ed.: When you sell a property in the United States and pay capital gains taxes to the U.S. government, you would report that tax payment when you file your taxes in Canada. There is a tax treaty between Canada and the United States which is in place to prevent double taxation. You would report the gain on your Canadian tax return, as well as any capital gains taxes paid in the United States. If the taxes paid in the United States were sufficient to meet the taxes payable for the capital gain to the CRA, then no further taxes would be payable. If the taxes paid in the United States were not sufficient to meet the tax obligation on the capital gain to the CRA, then you would pay the CRA the difference.