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www.snowbirds.org
CSA TRAVEL INFORMATION GUIDE
General questions concerning U.S. tax laws or tax-filing procedures can be directed to:
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U.S. Internal Revenue Service
Telephone (267) 941-1000
Toll-Free 1-800-829-1040 (from within U.S. only)
General questions concerning Canadian tax laws or tax-filing procedures can be directed to:
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Individual income tax inquiries (calls from within Canada only)
1-800-959-8281
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Individual income tax inquiries (calls from U.S. or Canada)
1-800-267-5177
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Individual income tax inquiries (calls from outside North America) – accepts collect calls
1-613-952-3741
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Canada Revenue Agency website:
www.ccra.gc.ca
(English)
Agence du revenue du Canada website:
www.adrc.gc.ca
(French)
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Automated service available 24-hours a day.
Agents available during regular call centre operating hours.
Selling (Disposing) of Property in the United States
Do you hold foreign property?
If at any time in the tax year you had foreign property with a total cost of more than $100,000 CAD,
special Canadian tax rules may apply to you. If applicable, refer to the Canada Revenue Agency (CRA)
income tax guide or speak with your tax preparer.
Capital Gains?
It is important to remember that second or vacation home, whether located in Canada or the United
States, is potentially subject to capital gains tax upon their sale.
If your vacation home is located in the United States, generally a withholding tax of 10% of the gross
sale price is payable under the Foreign Investment in Real Property Tax Act, 1980 (FIRPTA). The tax
amount withheld can be offset against the U.S. income tax that is payable on any capital gain on the
sale, and refunded if the amount withheld exceeds the tax owing. There are two exceptions to this
10% withholding rule:
1.
If the selling price of your U.S. based property is less than $300,000 USD and the purchaser
intends to use the property as their principal residence, withholding under FIRPTA does not
apply. To apply, the purchaser must have definite plans to reside at the property for at least one
half of the time that the property is in use during each of the next two years following the sale.
While the buyer using the property as his/her principal residence cancels the need to withhold
part of the proceeds on closing, please note that it does not cancel your general tax liability
for any capital gains realized on the sale. You still must complete a U.S. income tax return, and
possibly pay capital gains tax, on the sale of your property.
2. As an alternative to having an automatic 10% of the gross selling price withheld, if the U.S.
tax liability on the sale of your property is calculated to be less than the amount that would
be withheld under the 10% withholding rule, it may be possible to obtain a “withholding
certificate” from the IRS that will allow only this smaller amount to be withheld at the time