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  US Citizen living in Canada going business in Canada and the US

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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