As a US citizen who lives in USA, if I buy rental condo in Vancouver BC, what kind of tax I should pay on the profit?
As former residence of BC and current residence in California, I just sold my townhouse in Vancouver. This is just from my personal experience with talking to tax accountant there, you will be subject to regular capital gain tax, I think it is about 20%, and since you are living in US, you also need to pay tax to Uncle Sam. Due to the treaty, you will get the tax credit you pay to CRA. For US, you pay capital gain tax 15% (could vary based on your bracket) + 9-10% to California + 3.8% (if you are subject to Obama care tax). Basically your US tax bill will be higher than CRA for most case.
Usually, the treaty between countries make you pay the most taxes they can, so the maximum between countries!!!
I'm Canadian In USA since 2009 and ex financial planner, had coached over 850 clients in finances, usiness and rwal eatate, so I learned a lot on international taxes since I'm here, forms to provide, etc... a real nightmare that only 3 or 4 attorneys and accountants out of 25 can deal with international matters!!!
Ex: in Canada if your tax bracket is 40%, and in USA 25%, good chance you will have to pay the extra 15% to make it 40% total.
But most importantly, there are new laws since 2011 and 2014 that your accountants are not telling you about because most don't know unless they are specialized in International. The international filings are really crazy with 5k penalty per year and per form missing. Be sure you are on the right side of the fence and get the RIGHT INFO. As examples, the forms 8938, fbarr, 5471, 8833, 5472, 8921, 3520, 926, subpart-F, etc... are only few examples of the nightmare you maybe in, without knowing, because most people don't know!!! That is pretty ridiculous...
They make everything impossible for international investors and entrepreneurs!! They think everyone is a multinational who can afford 92k in tax planning!!!!
Be careful and let me know if I can help with my experience and connections Canada-USA.
Stay safe and play by the book and file all forms required. :)
Good advice above, I would also reccommend choosing a diffeent vehicle than Vancouver condos. There are much better opportunities here unless it was an emotional or personal decision.
I never buy condos, due to high HOA fees and slow appreciation...
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