Taxation System



So you remember that our story is about a couple Jane and Michael who want to avoid paying US tax for their home. As Jane is Canadian only and Michaels is Canadian and American, the easiest way out of this situation is to simply to give Michael’s share of the house to Jane before starting the selling process (and better several years before the sale). But in this case some legal advice is also required because in the US such reselling/re-giving of the house may result into US gift tax implications.

Another issue in this situation is that if the couple decides to resell the condo in the US (you remember it was bought by Jane), then she will be obliged to pay both US and Canadian capital gains tax on such kind of sale. But sometimes Jane might be able to use the US tax paid as a credit in order to offset the Canadian tax on the sale. In this case to make the process less money-wasting, legal help is highly advised.


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