Tax Issues To Consider By Canadians Investing In US Real Estate Market

I am often being approached by many Canadians asking about the current investment opportunity in US real estate market.

The opportunity might be very attractive, but investing in US or any other country for that matter is very complex for ordinary Canadians.

There are major tax implications to consider for investment property from both US and Canadian Tax agencies.

As a Canadian investor, you must report all your foreign investment over $100,000 to Canada Revenue Agency and also your income from your foreign investment sources to determine tax payer taxable income,

In US, Canadian investor must also file US income tax return and report all income from investment property to the US tax authority. Canadians also must obtain a US tax payer identification number (TIN) from IRS. Without a TIN, Canadian investor would not be able to realize the income from the property and transfer it to Canada. There is also the possibility of 30% source deduction of any profit from the investment property by the IRS.

If you are considering investing in US properties, it would be prudent to seek advice from a qualified tax or investment advisor, who are experts in cross border taxation.