Personal Finance

Canadian citizen moving back from US - cost amount on US property

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  • May 27th, 2019 3:13 pm
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May 24, 2019
1 posts

Canadian citizen moving back from US - cost amount on US property

Hi all,

I've done a lot of Googling and haven't been able to find a clear answer for this, so hoping that experts here would be able to help.
I'm a Canadian citizen who's been living in the US for the past 20 years, and will be moving back in 2 weeks(!)

I have a condo in New York that I bought 4 years ago, that I will not be selling upon my return. And I have a few questions:

1. is there anything that I need to declare regarding the condo as I resume residency at the airport?
2. when I eventually file the T1135 form after I move back, is the Cost Amount of the condo what I paid for when I bought it? Or is it the value when I become a Canadian resident again?
3. if the Cost Amount is the condo's value when I become a Canadian resident, what kind of documentation would I need to show the valuation?

I know this is really cutting it close, any information or advice would be very much appreciated!
5 replies
Deal Addict
Nov 13, 2013
2436 posts
1204 upvotes
Ottawa
CanadianInNYC wrote: Hi all,

I've done a lot of Googling and haven't been able to find a clear answer for this, so hoping that experts here would be able to help.
I'm a Canadian citizen who's been living in the US for the past 20 years, and will be moving back in 2 weeks(!)

I have a condo in New York that I bought 4 years ago, that I will not be selling upon my return. And I have a few questions:

1. is there anything that I need to declare regarding the condo as I resume residency at the airport?
2. when I eventually file the T1135 form after I move back, is the Cost Amount of the condo what I paid for when I bought it? Or is it the value when I become a Canadian resident again?
3. if the Cost Amount is the condo's value when I become a Canadian resident, what kind of documentation would I need to show the valuation?

I know this is really cutting it close, any information or advice would be very much appreciated!
I am not an accountant. For sure you want to talk to one to get the best advice on valuation in both countries. (You only mention Canadian rules I assume because you have already spoken to someone about the US side of the equation)

What I do know is there are a lot of pit falls with owning US property as a non-resident (assuming you will rent the condo out) that can might make selling a better option despite the short time you have owned it. Having to deal with both CRA and IRS going forward for one. While you may think we have a tax treaty that will avoid double taxation this doesn't protect you against currency changes. For example if the property increases in value but US dollar falls you will have lost money over today but will have to pay US tax. Same is true for Canadian tax if Canadian dollar gains even if the property doesn't change value. Plus you have two countries that may challenge your valuation estimate. On the Canadian side this is much simpler if it is a recreational property.
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Jul 17, 2008
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Depending on the location, a condo in New York can be a gold mine. I wouldn't just sell it because it's a nuisance tax wise.
Deal Addict
Nov 13, 2013
2436 posts
1204 upvotes
Ottawa
Messerschmitt wrote: Depending on the location, a condo in New York can be a gold mine. I wouldn't just sell it because it's a nuisance tax wise.
I don't understand this kind of logic. Sure it is a gold mine but you already paid a lot of gold to buy it. The people will always want to live in New York argument doesn't make sense to me as that is already factored into the price.
Agree that if the asset is distressed or you have inside information that it will increase in value or something the hassle and expense of tax compliance is not a big issue but usually this is not the case. I personally owned a condo in the US I sold when I moved back to Canada in 2007. That worked out very well in $US terms as it fell in price. Not so well if you factor the drop in Canadian dollar. Either way nobody can predict future gains with certainty.
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Jul 17, 2008
11042 posts
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Real estate like all other investments tend to appreciate over the long term. And with RE, location is important. If his condo is in the suburbs of new york, maybe not so much. if he has a condo DT New York, I would never sell it. He paid the factored price in 4 years ago. Now there is another factored price, and in 20 years from now, it will be another (higher or lower, but most likely higher)

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