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What are the tax implications of selling U.S. real estate?
– moneysense.ca
Tax implications of selling U.S. real estate
Canada taxes its residents on worldwide income. This means income in other countries is generally taxable in Canada. The U.S. taxes the sale of U.S. real estate by non-residents. So, Mary and Vic, a Canadian selling U.S. real estate can have tax implications in both countries.
What are the U.S. tax implications?
The U.S. government allows exemptions from capital gains tax for real estate in certain circumstances. Similar to the principal residence exemption in Canada, there is a principal residence exclusion in the U.S. It allows a capital gains tax exclusion of up to $250,000 of the capital gain on the sale of a qualifying home. For a couple, the exclusion is doubled to a total of $500,000.
U.S. taxpayers can also postpone paying capital gains tax if they sell a rental or business property and replace it with a similarly valued property…
