Left Canada and moved to US – Deemed Disposition Rules

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Question

Great website!   Here is my situation…please let me know if you can help.  Thank you…

I left Canada (XXXXXX) about 9 years ago (in XX) and moved to California, where I now live.  When I left Canada, I filed my Cdn taxes for the last year I resided in Canada (I’m not sure if my last Cdn return included US income from late Oct-Dec 31 of the year I left Cda/arrived in the US) and I did not file anything else.  I now understand that Canadians cutting residential ties and moving to the US need to file something with the Canada Revenue Agency?

I have not earned any Canadian source income since leaving Cda and thus have not filed a Cdn tax return since leaving.  When I left Canada I believe that I had no assets that fall under the deemed disposition rule.  To confirm, the deemed disposition rule EXCLUDES residential real estate and cars.  I’m concerned because I may not have filed any required tax paperwork with the Canada Revenue Agency when I left Canada.  I owned residential real estate in Ontario as a joint owner when I left Cda, and continue to do so (one piece of property).

Currently, I have US (California) employment income, as well as a US (California) single member LLC.  I’m thinking of doing some independent contractor work for a Canadian company (located in Ontario) and that’s why I’m contacting you.  If I file a future Cdn tax return for my Canadian independent contractor work income as a non-resident of Canada, will the Canada Revenue Agency look up my “file” and ask about why I didn’t file required paperwork when I left Canada (if any)?   Is there a minimum amount of Cdn income that I need to hit before I’m required to file a Cdn tax return?

READ  Moving from California to BC - IRA to RRSP Issues

Please let me know what you think…thank you very much!

Yours truly,
XX

Answer

XX

You should be ok as long as you filed a final return with CRA when you left and included a “departure date” on your final return.

Has the Ontario property been earning any rental income since you left? If so I hope you’ve been filing s.216 returns.

Give me a call and we can chat for a few minutes about your tax situation.

Regards

Phil

Phil Hogan, CA
250-661-9417

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