For Canadians buying real estate in the US, there are plenty of opportunities and advantages, however there are a number of potential traps and pitfalls if you do not plan and use competent professionals to help through the process. In many ways, the process seems obvious with few, if any, roadblocks. In fact, the process is so easy that many Canadian do not seek proper advice or get the wrong advice from people that do not specialize in this area.
There is no one correct way to own real estate in the US, some of the factors include, whether the property will be used only as a second home, or if it will be used as a business such as a rental. Other factors include whether you will be the sole owner or if you will own with your spouse, friends or business associates. The state you purchase in has implications as well as your worldwide net worth and the value of the property in the US. But mostly it depends on your personal view toward, costs, complexity and risk. Do not accept a one size fits all solution; contact us for a one-half hour consultation.
The cost of a one-half hour consultation is $350. During the consultation, our professionals can help to guide you through the most important and scary part of the process, buying. Through a one-to-one consultation, our professionals can explain and advise on the following issues, as they apply to your unique situation:
- Explain the pros and cons of various types of ownership
- Explain the US nonresident estate system and why this is not generally a problem and if it is, how to avoid it
- Explain US probate and how to avoid it
- Provide advice on how to best own/title your property to provide tax efficiency, asset protection, and avoidance of US estate taxes
- Explain the income tax withholding requirements and how to avoid or minimize withholding when you rent and when you sell
- Explain the income tax filing requirements
- Explain other non-tax reporting requirements
- Provide a referral to an attorney that can set up a business entity to own the property, if necessary
- Answer any other questions you may have
On an ongoing basis, Cross Border Tax can prepare any US or Canadian tax returns, apply for tax identification numbers for you or your business entity, and assist with the bookkeeping for your business, if needed. Tax preparation and bookkeeping services are provided on an hourly basis.
We suggest that you read the book, Buying Real Estate in the US: The Concise Guide for Canadians, by Dale Walters, the President and CEO of Cross Border Tax & Accounting. Information about the book and how to order can be found at www.buyingrealestateintheus.com.