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levr
levr, Tax Advisor
Category: Capital Gains and Losses
Satisfied Customers: 28084
Experience:  Working for a large tax preparation service
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If I have a principal residence cottage last 10 years

Customer Question

If I have a principal residence cottage for the last 10 years in Canada but work in the United States will I need to pay Capital Gains if I were to sell it? Would I need to claim it in Canada and the U.S.?
Submitted: 6 months ago.
Category: Capital Gains and Losses
Expert:  levr replied 6 months ago.
If you are US citizen - and that was your primary residence - no reporting required if the gain is below the amount you are eligible to exclude (up to $250k for a single person)If you are neither US citizen nor resident alien - as a nonresident alien you only report income from US sources on your nonresident US income tax return - and that gain will be form Canadian sources - this is not reported.If you are US person (US citizen or a resident alien) AND the gain is above allowable exclusion - reporting is required..
Expert:  levr replied 6 months ago.
In Canada...When you sell your home or when you are considered to have sold it, usually you do not have to report the sale on your income tax and benefit return and you do not have to pay tax on any gain from the sale. This is the case if the home was your principal residence for every year you owned it.If your home was not your principal residence for every year that you owned it, you have to report the part of the capital gain on the property that relates to the years for which you did not designate the property as your principal residence. To do this, complete Form T2091(IND), Designation of a Property as a Principal Residence by an Individual (Other Than a Personal Trust). If you are the legal representative for a deceased person, you can designate a property using Form T1255, Designation of a Property as a Principal Residence by the Legal Representative of a Deceased Individual.

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