If I sell my investment property in USA, do I need to pay any tax to Canada?

Feb 13th, 2018 10:10 am

#1

gimegime [OP]: Sr. Member; Jan 4, 2013; 578 posts; 117 upvotes; TORONTO

Feb 13th, 2018 10:10 am

If I sell my investment property in USA, do I need to pay any tax to Canada?

Property was used for rental , property was in a location mainly attractive to Norwegians, didn’t gain much appreciation. Want to use the proceeds of the same in west coast for another investment.

I am not intending to take the profit back to Canada.

In this case, do I need to pay any tax to Canada?

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Feb 13th, 2018 10:57 am

#2

ilim: Deal Addict; Jan 17, 2006; 2277 posts; 2411 upvotes; Toronto

Feb 13th, 2018 10:57 am

gimegime wrote: ↑ Property was used for rental , property was in a location mainly attractive to Norwegians, didn’t gain much appreciation. Want to use the proceeds of the same in west coast for another investment.

I am not intending to take the profit back to Canada.

In this case, do I need to pay any tax to Canada?

You have to report sale in both US and Canada even if you are planning to reinvest it right away in US. Will CRA find out if you don't report, likely not, but you should report it by the book.

+1

Feb 13th, 2018 10:59 am

#3

Smiley22: Deal Addict; Mar 14, 2006; 1887 posts; 1743 upvotes; Toronto

Feb 13th, 2018 10:59 am

It is considered foreign investments so you still are required to report the gain against your income tax.

Feb 13th, 2018 11:12 am

#4

gimegime [OP]: Sr. Member; Jan 4, 2013; 578 posts; 117 upvotes; TORONTO

Feb 13th, 2018 11:12 am

Is it reported in the same section as like an investment property in Canada? Do you have a field number? Thanks.

The US part is good for me, I know how to file it.

Smiley22 wrote: ↑ It is considered foreign investments so you still are required to report the gain against your income tax.

Feb 13th, 2018 2:00 pm

#5

burnt69: Deal Addict; Oct 6, 2015; 2463 posts; 1388 upvotes

Feb 13th, 2018 2:00 pm

Not only do you need to report the sale, but you might need to do a voluntary disclosure if you weren't reporting the ownership of foreign property on the appropriate form as required on taxes. Or face the consequences of failing to file the T1135.

Feb 13th, 2018 11:46 pm

#6

KAN: Sr. Member; Jan 13, 2005; 884 posts; 98 upvotes; Montreal

Feb 13th, 2018 11:46 pm

burnt69 wrote: ↑ Not only do you need to report the sale, but you might need to do a voluntary disclosure if you weren't reporting the ownership of foreign property on the appropriate form as required on taxes. Or face the consequences of failing to file the T1135.

What if it is owned by a corp you control ? How does the filing or reporting goes ?

Feb 13th, 2018 11:48 pm

#7

burnt69: Deal Addict; Oct 6, 2015; 2463 posts; 1388 upvotes

Feb 13th, 2018 11:48 pm

KAN wrote: ↑ What if it is owned by a corp you control ? How does the filing or reporting goes ?

https://www.canada.ca/en/revenue-agency ... 1146_97704

Applies to T2 tax-filers as well, the T1135 requirements.

Feb 14th, 2018 1:10 pm

#8

eonibm: Deal Expert; Aug 2, 2010; 15193 posts; 4974 upvotes; Here 'n There

Feb 14th, 2018 1:10 pm

If you didn't have to pay tax on your worldwide income as a Canadian then we'd all only be investing outside the country!

+3

Feb 14th, 2018 6:15 pm

#9

OttawaGardener: Deal Addict; Aug 30, 2011; 3490 posts; 1232 upvotes; Ottawa

Feb 14th, 2018 6:15 pm

eonibm wrote: ↑ If you didn't have to pay tax on your worldwide income as a Canadian then we'd all only be investing outside the country!

^ this. Of course you have to pay tax on the income.

Feb 14th, 2018 10:13 pm

#10

canoek: Deal Addict; Jul 30, 2015; 3571 posts; 2755 upvotes; Toronto, ON

Feb 14th, 2018 10:13 pm

eonibm wrote: ↑ If you didn't have to pay tax on your worldwide income as a Canadian then we'd all only be investing outside the country!

What if you're not a resident of Canada? Do you still have to pay taxes in Canada?

Feb 15th, 2018 7:11 am

#11

OttawaGardener: Deal Addict; Aug 30, 2011; 3490 posts; 1232 upvotes; Ottawa

Feb 15th, 2018 7:11 am

canoek wrote: ↑ What if you're not a resident of Canada? Do you still have to pay taxes in Canada?

Be more specific. If you're a "factual resident" living temporarily outside Canada then yes, you have to. If you have emigrated to another country and have no Canadian-source income, then no. There are other situations, but I don't want to explain them all without knowing what you mean.