For Canadian residents spending time in the United States (“US”), it is important to ensure that the heat you receive next time you venture south is only felt from the sun, and not the Internal Revenue Service (“IRS”). 

Uncle Sam Wants YOU to file US tax returns…and he has recruited foreign banks into his army to report you!  Now you will get caught if you don’t file returns and report foreign income.

The US Government has required its citizens to report on their foreign bank accounts since 1970; however, its controversial revisions of October 2008 continue to cause tax practitioners, citizens and persons doing business in the US headaches.  We expect the US Government to aggressively enforce these reporting requirements since they assist the US Government in identifying abusive offshore accounts such as the UBS accounts (discussed in our blogs on September 8, 2009 and February 10, 2010).

Apologies in advance ... this is lengthy and a little technical but it's a complex topic! Notwithstanding the recent weakening of the Canadian dollar, the decline in the value of US real estate may still present some attractive buying opportunities for Canadians.

The acquisition of US real estate by a Canadian resident not only has Canadian tax implications, but may also create US income, gift and estate tax consequences.

As most readers know, Canada’s system of taxation is one that will tax based upon residency. To the extent that you are a resident of Canada, you will generally pay Canadian income tax on your worldwide sources of income. To the extent that you are a non-resident of Canada, only certain types of income (such as Canadian source income or dispositions of taxable Canadian property) will be subject to Canadian income tax. Most of the countries in the world have a similar system of taxation as that in Canada where the primary tax basis is that of residency.