Ed.: Mr. Weylie − our lawyer − replies: Upon the sale of the U.S. property, there is a withholding of 15% of the sale price, (it cannot be reduced in any way) which funds must be sent to the IRS within 20 days of the closing. There is an exception if the sale price is less than $300,000.00 AND the property is going to be occupied by the purchaser or members of his/her family for at least 50% of the occupied time over the two years following the closing. There is also a procedure available where one can apply prior to the closing for an exemption certificate where one shows what the capital gain will be and the tax thereon, in which case only the amount of tax need be transmitted.This is complicated, and of course you need to have the certificate issued and received prior to the closing. Capital gains tax is payable on the whole gain less any deductions. In calculating, the taxable gain deduction can be taken for the costs of purchase, costs of sale, and the costs of any improvements made to the property during ownership. Costs such as maintenance or taxes are not generally deductible. There is no time limit involved.Although it is best to have receipts, honest estimates can be used, as the tax return only deals in figures. The only time at which receipts might be necessary would be in the event of an audit. A tax return must be filed in the year following the sale in every case, at which time the taxable gain is calculated, the tax thereon, and claim made for any excess funds transmitted. Tax is about 20%. Where property is owned by multiple owners, a return must be filed for each person as to their share of ownership. If you care about Canada, please VOTE! BirdTalk Featuring the letters & concerns of our members SEND YOUR LETTERS TO Bird Talk, c/o CSANews 180 Lesmill Road Toronto, Ontario M3B 2T5 or by e-mail: csawriteus@snowbirds.org Bird Talk Ed.: Most snowbirds do nothing; who wants to own snow tires? Mostly, we are driving on major highways to get to our destinations and they are usually kept very clear. The weather forecast is our greatest aid and no one will set out with any snow either happening or forecast along their route. If you should get caught by a surprise storm, simply hunker down for a couple of days and stay wherever you are. We had a wonderful three-day winter wonderland in the Appalachians a few years ago − one of our best trips south. Dear Bird Talk, ank you for theMember Advisory outlining the entry/exit initiative between Canada and the U.S., particularly as it relates to immigration rules. I entered the U.S. on November 15, 2018 and returned 179 days later on May 13, 2019. e clock starts again on November 15 and it seems tome that it will be the same date every year going forward. While I can see that the date could change to a later date, it can never be an earlier date. I could shorten my stay to four months and return for the month of October without using up the 182 days, but my 12-month period will always start on November 15. Am I correct? Don Bowder Oakville, ON Ed.: Pretty close. As you stated in a later e-mail – “Therefore, you calculate by looking back over the last 365 days. If you have been in the U.S. for more than 180 days within the last 365 days, you are offside and subject to deportation. You may also be refused entry to the U.S. in the future. If you shortened your trip to four months, then it would be totally legal to return in October the following year, or even September. But then your 365 days for the new trip would start on the day in October (or even September) when you crossed again. Dear Bird Talk, Is it true that it is now obligatory to have an IDL when travelling to the U.S.? I have been told that as of July 2019, it is mandatory. I look forward to your reply and con rmation. Claire Morris Green Valley, ON Ed.: Nonsense.This was a scam, possibly started in Georgia, to scare snowbirds. One of our Canadian competitors sold a lot of IDLs during a short period a few years ago. We have written documentation from the State of Georgia refuting this nonsense. No IDL is required anywhere in the U.S., but you must carry your Canadian driver’s licence, of course. I would like to know who told you this, so that we can set them straight. Dear Bird Talk, We own a second home inMesa, Arizona. I am aware that any capital gain on a real estate sale in the U.S. is reportable and taxable. ere is also a 15%withholding tax on the sale price, unless the sale price is US$300,000 or less; then no withholding is required. In the future (and assuming that tax laws remain the same), if the property is sold at a price in excess of US$300,000, is some of the 15% withholding tax recoverable a er ling and do I pay a capital gains tax on only the amount greater than US$300,000? Second, can I deduct any renovations, improvements or maintenance expenses incurred over the years against any capital gains tax, thereby reducing the sale price to less than the US$300,000 threshold? If so, how long do I keep the records of such renovations or improvements? In other words, is there a time limit for claiming such deductions? ank you. Michel Brisebois Victoria, BC CSANews | FALL 2019 | 11
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