when you are a citizen and you have property otside the country

[Flyeur75]

Alphazip: Your statement about the T1135 is inaccurate.

On line 266, Form T1 states:

"Did you own or hold foreign property at any time with a total cost of more than CAN$100,000? If yes, complete Form T1135 and attach it to your return."

The implication is, that whether or not your foreign property generates any income is irrelevant. If you answer "yes" to the question on line 266 of Form T1, and the total cost of the property exceeds CAD$100,000, you must disclose your ownership of the property by filing Form T1135.

Form T1135 includes a question that states: "Total income reported on your tax return in the year from the above assets:" , to which you would state zero dollars if there in fact was no income in the year (as would be the case with a vacation home that is not rented out).

 

[hoping_canadian]

??? : :'(

 

[alphazip]

That would apply if your vacation home in FL is your PRIMARY residence. So if your Florida home is your primary residence, you do not file income tax to Canada. If your primary residence is in Canada, your "vacation" home in Florida is NOT your PRIMARY residence, thus you have to report it.

http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/frgn/1135_fq-eng.html#h7

28. If an individual owns a condominium in Florida that has a cost amount of $120,000, is the property specified foreign property for the purposes of form T1135 if the condominium is:
a.used exclusively by the taxpayer as a vacation property?
b.rented out for eight months of the year with a reasonable expectation of profit and kept for personal use the other four months?
c.rented out for part of the year without a reasonable expectation of profit for the purpose of recovering a portion of condominium expenses?

Specified foreign property does not include personal-use property. Personal-use property is generally defined as property owned by the taxpayer that he or she or a related party uses primarily for personal and enjoyment purposes. The CRA takes the view that “primarily” means more than 50%. Whether a particular property is primarily for personal use and enjoyment is a question of fact that is determined on a case-by-case basis.

In situation (a), the individual does not need to report the condominium since it is held primarily for personal use and enjoyment.

In situation (b), the property is not held primarily for personal use and enjoyment. As a result, it is a specified foreign property and has to be reported on form T1135.

In situation (c), if there is no reasonable expectation of profit and the individual is merely recovering part of the condominium expenses, the CRA will consider it a personal-use property. As such, the property is not a specified foreign property and is excluded from the reporting requirements of form T1135.

 

[alphazip]

Alphazip: Your statement about the T1135 is inaccurate.

On line 266, Form T1 states:

"Did you own or hold foreign property at any time with a total cost of more than CAN$100,000? If yes, complete Form T1135 and attach it to your return."

The implication is, that whether or not your foreign property generates any income is irrelevant. If you answer "yes" to the question on line 266 of Form T1, and the total cost of the property exceeds CAD$100,000, you must disclose your ownership of the property by filing Form T1135.

Form T1135 includes a question that states: "Total income reported on your tax return in the year from the above assets:" , to which you would state zero dollars if there in fact was no income in the year (as would be the case with a vacation home that is not rented out).

Really? The instructions say something different:

2. Do I have to report foreign personal-use property on form T1135?

No, you do not have to report personal-use property. This includes vacation property that you use primarily as a personal residence (see real property questions below), and listed personal property such as works of art, jewelry, rare folios, rare manuscripts, rare books, stamps, and coins.

 

[screech339]

http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/frgn/1135_fq-eng.html#h7

28. If an individual owns a condominium in Florida that has a cost amount of $120,000, is the property specified foreign property for the purposes of form T1135 if the condominium is:
a.used exclusively by the taxpayer as a vacation property?
b.rented out for eight months of the year with a reasonable expectation of profit and kept for personal use the other four months?
c.rented out for part of the year without a reasonable expectation of profit for the purpose of recovering a portion of condominium expenses?

Specified foreign property does not include personal-use property. Personal-use property is generally defined as property owned by the taxpayer that he or she or a related party uses primarily for personal and enjoyment purposes. The CRA takes the view that “primarily” means more than 50%. Whether a particular property is primarily for personal use and enjoyment is a question of fact that is determined on a case-by-case basis.

In situation (a), the individual does not need to report the condominium since it is held primarily for personal use and enjoyment.

In situation (b), the property is not held primarily for personal use and enjoyment. As a result, it is a specified foreign property and has to be reported on form T1135.

In situation (c), if there is no reasonable expectation of profit and the individual is merely recovering part of the condominium expenses, the CRA will consider it a personal-use property. As such, the property is not a specified foreign property and is excluded from the reporting requirements of form T1135.

Specified foreign property does not include personal-use property. Personal-use property is generally defined as property owned by the taxpayer that he or she or a related party uses primarily for personal and enjoyment purposes. The CRA takes the view that “primarily” means more than 50%. Whether a particular property is primarily for personal use and enjoyment is a question of fact that is determined on a case-by-case basis.

You seem to forget this little tidbit. More than 50% of the time. It means you are living in US more than 6 months of the time. Once that happens you are not a resident of Canada.

 

[alphazip]

Specified foreign property does not include personal-use property. Personal-use property is generally defined as property owned by the taxpayer that he or she or a related party uses primarily for personal and enjoyment purposes. The CRA takes the view that “primarily” means more than 50%. Whether a particular property is primarily for personal use and enjoyment is a question of fact that is determined on a case-by-case basis.

You seem to forget this little tidbit. More than 50% of the time. It means you are living in US more than 6 months of the time. Once that happens you are not a resident of Canada.

Sorry, but you don't understand the issue. If you have a vacation house that is MOSTLY used for your own personal use, you do NOT report it. If you MOSTLY rent it out, you DO report it. If you have a $500,000 house in Phoenix that you live in for 5 months of the year, and it sits vacant for the other 7 months, you DON'T report it. It's that simple.

Of course, you have to report and pay Canadian tax on any rental income from a foreign property.

 

[screech339]

Sorry, but you don't understand the issue. If you have a vacation house that is MOSTLY used for your own personal use, you do NOT report it. If you MOSTLY rent it out, you DO report it. If you have a $500,000 house in Phoenix that you live in for 5 months of the year, and it sits vacant for the other 7 months, you DON'T report it. It's that simple.

Of course, you have to report and pay Canadian tax on any rental income from a foreign property.

I still think you are in violations of the reporting more than 100000 asset rule. I suspect you filed the taxes without an accountant involved. They will tell you otherwise. You seem to keep ignoring the CRA view primary if it is used more than 50% of the time.

You can't have your cake and eat too by claiming to be a residence of Canada and spend more than 6 months in Florida.

 

[alphazip]

I don't have a foreign vacation home, but I can read the T-1135 instructions and the associated Q&A. If the instructions state that a foreign home used for personal use does not have to be reported, why would someone report it? The instructions also say that an IRA (U.S. version of an RRSP) doesn't have to reported, as long as (of course) taxes are paid on the funds withdrawn from such an account. Want an accountant? Here's one: https://www.cga-bc.org/members.aspx?id=13200 "For purposes of filing Form T1135, specified foreign property does not include personal use property which is mainly used for personal enjoyment (i.e. vacation home)". Here's another: https://www.pwlcapital.com/en/Advisor/Waterloo/Graham-Westmacott/Blog/Graham-Westmacott/March-2014/Tax-Tip-Do-I-Need-to-File-a-T1135 "Income producing real estate (i.e. vacation homes are exempt)" How about H&R Block? http://taxtalk.hrblock.ca/blog/own-foreign-property-make-sure-you-file-form-t1135/ "The reporting requirements do not apply to personal-use property (such as a vacation home used primarily as your personal residence)"

 

[screech339]

I don't have a foreign vacation home, but I can read the T-1135 instructions and the associated Q&A. If the instructions state that a foreign home used for personal use does not have to be reported, why would someone report it? The instructions also say that an IRA (U.S. version of an RRSP) doesn't have to reported, as long as (of course) taxes are paid on the funds withdrawn from such an account. Want an accountant? Here's one: https://www.cga-bc.org/members.aspx?id=13200 "For purposes of filing Form T1135, specified foreign property does not include personal use property which is mainly used for personal enjoyment (i.e. vacation home)". Here's another: https://www.pwlcapital.com/en/Advisor/Waterloo/Graham-Westmacott/Blog/Graham-Westmacott/March-2014/Tax-Tip-Do-I-Need-to-File-a-T1135 "Income producing real estate (i.e. vacation homes are exempt)" How about H&R Block? http://taxtalk.hrblock.ca/blog/own-foreign-property-make-sure-you-file-form-t1135/ "The reporting requirements do not apply to personal-use property (such as a vacation home used primarily as your personal residence)"

Even H&R block says "primarily" which CRA says primarily if used more than 50% of the time.

I would suggest you go to H&R block free consultation to confirm that you don't have to report it.

 

[alphazip]

I still think you are in violations of the reporting more than 100000 asset rule. I suspect you filed the taxes without an accountant involved. They will tell you otherwise. You seem to keep ignoring the CRA view primary if it is used more than 50% of the time.

You can't have your cake and eat too by claiming to be a residence of Canada and spend more than 6 months in Florida.

More than 50% of the time means this: you own a condo in Florida...you live in it 4 months...you let is sit vacant 6 months...you rent it 2 months. Over 50% of the time it is NOT rented. Therefore, it's a personal use property that does not have to be reported. Let's say the person NEVER rents the property. According to you, if it's worth $100,000, it has to be reported. That's not what the instructions say.

 

[screech339]

More than 50% of the time means this: you own a condo in Florida...you live in it 4 months...you let is sit vacant 6 months...you rent it 2 months. Over 50% of the time it is NOT rented. Therefore, it's a personal use property that does not have to be reported. Let's say the person NEVER rents the property. According to you, if it's worth $100,000, it has to be reported. That's not what the instructions say.

That is not what 50% of the time for personal use means.

 

[alphazip]

50% does NOT mean a person has to live in the house 50% of the time. If I own a vacation home in Florida I never rent it and never live in it, it's till my personal use home and it does not need to be reported.

 

[alphazip]

That is not what 50% of the time for personal use means.

I think you had better check with an accountant. You don't understand something quite simple.

https://www.pwlcapital.com/en/Advisor/Waterloo/Graham-Westmacott/Blog/Graham-Westmacott/March-2014/Tax-Tip-Do-I-Need-to-File-a-T1135 "Income producing real estate (i.e. vacation homes are exempt)" Exempt=NOT INCLUDED. Vacation homes do NOT need to be included in the report.

 

[screech339]

50% does NOT mean a person has to live in the house 50% of the time. If I own a vacation home in Florida I never rent and never live in, it's till my personal use home and it does not need to be reported.

I still disagree. I believe it actually meant physically in the vacation home to be considered primary residence in CRA's view. Anyway at this point, we have to agree to disagree. Unless some other forum members says otherwise.

 

[alphazip]

I still disagree. I believe it actually meant physically in the vacation home to be considered primary residence in CRA's view. Anyway at this point, we have to agree to disagree. Unless some other forum members says otherwise.

I guess so, because you probably won't understand this either. You'll claim the owner has to live in the U.S. 50% of the time, which is not what it means at all. If that were the case, it wouldn't be a "vacation home":

http://www2.canada.com/saskatoonstarphoenix/news/story.html?id=751aabb5-acf3-4aa4-9187-52bb4a087b1d

"Did you buy a vacation home in Arizona or Florida when real estate prices were low and the Canadian dollar was strong? Even if the cost of your property exceeded $100,000 you don't have to mention it if you use the vacation home exclusively for personal use and enjoyment. Only if you rent out the property do you have to list it on the T1135 form."