What Happens When a Canadian Sells U.S. Property?

For my first blog entry, I have decided to whet your appetite with an excerpt from my book, Owning U.S. Property- The Canadian Way. Here’s the first half of one of my favorite chapters – Chapter 10: Selling Your U.S. Vacation Home

Chapter 10: Selling Your U.S. Vacation Home

By David A. Altro.

The examples in the following text are based on taxation figures from previous years and may not reflect the most current tax requirements.

Reducing the U.S. Capital Gain Tax

So, you’re selling your condo in Boca Raton, Florida. You paid $500,000 and the sale price is $1 million… Nice work!

IRS Withholding under FIRPTA

FIRPTA stands for Foreign Investment in Real Property Tax Act which is the U.S. federal law that states that, under section 1445 IRC, 10% of the gross sales price of the sale of real estate by a non-resident of the U.S. must be withheld by the closing agent on behalf of the buyer and remitted to the Internal Revenue Service. In our above example that would be $100,000.

This is NOT a tax; it is simply a withholding whereby the IRS will apply it against the tax payable on the capital gain. In this case, the capital gain is the difference between the sale price of $1 million and the initial purchase price of $500,000.
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New Toronto office

Toronto, Ontario – March 10, 2010

We are pleased to announce we have relocated our Toronto office. We are now located downtown at:

150 York Street Suite 800
Toronto, ON
M5H 3S5

In order to better service our clients from Ontario, Bonnie Altro has relocated to Toronto and is working full time from our downtown office. If you are interested in setting up a consultation in Toronto or any of our locations, please call 1 800 370-4860 or complete our online consultation form.

See all firm updates.

Assante Wealth Management

Saskatoon, Saskatchewan – March 1, 2010

David and Matt were the featured speakers for Assante’s high net worth clients during a lunch and learn seminar on cross border planning.