Blog post

Key Points

• Americans living in Canada face unique tax implications when selling their primary residence, including potential U.S. capital gains tax.
• The Canada-U.S. tax treaty offers some relief, but careful planning is necessary to avoid double taxation on the sale.
• Determining the tax basis of the property is crucial for calculating capital gains accurately in both countries.
• Exemptions, such as the U.S. primary residence exclusion, may reduce taxable gains, but specific criteria must be met.
• Consulting with a cross-border tax advisor is essential to navigate the complexities of selling a home as an American in Canada.

If you need help in reviewing your cross-border tax or investment situation, please feel free to reach out to us here. We look forward to speaking to you soon.

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Considering the difference in rules between Canada and the US with respect to how principal residences are taxed it can be challenging for Americans in Canada to truly assess the tax implications of their Canadian home sale. This is why I created this calculator. In basic terms it calculates an estimated amount of US tax on a Canadian principal home sale. Please note the following:

• This calculator is for informational purposes only and should not be used for tax planning or tax filing purposes. It uses simple assumptions to allow you to get a picture of your potential US tax liability on principal residence sales for US taxpayers living in Canada
• It assumes that the taxpayers is a US Citizen or green card holder living in Canada
• It assumes that the property was the taxpayers principal residence for the whole period of ownership
• The calculator will convert proceeds at an approximate exchange rate for today.
• It will approximate the exchange rate on the date of original purchase
• For married filing joint taxpayers the exemption will be $500,000 and for single individuals the exemption amount will be $250,000
• The tax on the net gain will be estimated using the highest capital gains rate plus Net Investment Income Tax (NIIT) for a total of 23.8%
• This calculator is a work in progress, so if you have questions and/or feedback please leave it in the comments below

[jms-house-sell-calculator]

Disclaimer: This calculator is for informational purposes only and should not be used for tax planning or tax filing purposes. If you need help with cross-border tax or investment planning please reach out to Phil at phil@philhogan.com