Home Buying in 97035>Question Details

Familykern, Home Buyer in 97035

We are Canadians on work visa in USA (resident alients). Want to buy house to live in for few years. Return to Canada then rent/ sell. Taxes involved?

Asked by Familykern, 97035 Sat Oct 1, 2011

We will buy house in USA as resident aliens. Live in the property for 2-3 years then return to Canada (become non-resident aliens) and rent or sell the property. Will we be subject to FIRPTA when we sell or 30 % tax if we rent since we will no longer live in USA?

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0 votes Thank Flag Link Wed Aug 29, 2012
The question should really go to a knowledgable CPA. Not to say that real estate agents can't advise you on this . . . but our license is not all inclusive. Taxes are a whole 'nother kettle of fish. We aren't licensed CPA's.

Without giving tax advise, any investment property is subject to capital gains tax. And toss in that you are also Canadians, and might be subjet to income tax in Cananda . . . yup, best to talk to a CPA that is knowledgeable on these things.

Real estate agents are only licensed to practice real estate . . . and tax advise really falls outside the purvue of our license. Don't rely on a real estate agent for this information . . . talk to a CPA. Taxes are complcated enough, toss in a rental, toss in Canadian citizens . . . you want to get expert advise from an expert in that area.

But, if you want advise on buying a property don't hesitate to ask!! Real estate I can do :-)

Carla Muss-Jacobs, Principal Broker/Owner
EBA Portland, LLC
Exclusive Buyer Agent since 1999
0 votes Thank Flag Link Mon Oct 3, 2011
I work with many International clients in the Portland Oregon market place who often purchase a home as a Resident Alien. While you should always consult a CPA or Attorney for tax or legal questions, I can tell you my experience with my clients. FIRPTA is related to Federal taxes that may apply when investment property is sold by a non-resident alien. If you are living in the home as your primary residence and considered a Resident-Alien (multiple Visa classifications apply) and then sell the home when relocating back to Canada, there should not be any tax withheld. If you move back to Canada and rent the home, then sell it some time later, it would be considered an investment property (no longer your primary residence) and subject to the withholding at closing. I hope this helps a little:) I have many clients that arrive on an L1/E1 Visas for 3 years that purchase a home and sell when they move.
0 votes Thank Flag Link Sun Oct 2, 2011
There are many factors in place here that complicate your answer. Some States, such as NJ carry an exit tax which can increase your tax burden when leaving.

Below is a small piece of information that may help lead you in the right direction. And of course, I would also consult a tax attorney or a CPA.

Q. My seller is a resident alien, does that mean FIRPTA applies?
A. A resident alien, for purposes of FIRPTA, is not a foreign person. FIRPTA defines a foreign seller as a non-resident alien individual, a foreign corporation not treated as a domestic corporation, or a foreign partnership, trust or estate. There are two ways to determine if a person qualifies as a resident alien under FIRPTA:

1. If a person has been issued an alien registration card ("green card") or

2. The substantial presence test that requires a person be physically present in the United States for a certain number of days a year. 183 days (pursuant to IRS Code).
0 votes Thank Flag Link Sat Oct 1, 2011
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