Cross Border Tax Planning for Canadians Selling U.S. Real Estate
Canada to Arizona was established to provide Canadians a trusted one stop resource to owning U.S. real estate including comprehensive cross border tax planning. We highly recommend speaking to our cross border tax experts prior to selling any property in the U.S. to ensure everything is structured correctly and eliminate all surprises.
FOREIGN TAXES FOR CANADIANS
The Foreign Investment in Real Property Tax Act or FIRPTA, applies to the disposition of U.S. real property by foreign owners. Canadians who sell a U.S. property may be subject to a 15% withholding of the purchase price by the IRS. There are ways to reduce or eliminate this withholding tax even if FIRPTA applies. If a seller can prove that his or her adjusted cost basis will reduce or eliminate his or her capital gain so that it amounts to less than 15% of the sale price, a special application can be made to the IRS asking for a reduction or exemption from FIRPTA. Our team has extensive experience working with Canadians and navigating their FIRPTA obligations.
WHAT WE DO
Our tax professionals have extensive experience navigating the complex FIRPTA rules. They frequently prepare successful applications to the IRS to assist Canadian clients in receiving reductions in withholding or exemptions from FIRPTA. Then they work with title companies and buyers to ensure a smooth sale and represent sellers for the closing and receipt of funds. They also help sellers receive early returns of funds withheld under FIRPTA. Our goal is to analyze our clients’ individual needs and implement the most advantageous plan for complying with FIRTPA so that clients can retain the maximum amount of gains upon their disposition of U.S. real property.
WHAT WE DO
Our tax professionals have extensive experience navigating the complex FIRPTA rules. They frequently prepare successful applications to the IRS to assist Canadian clients in receiving reductions in withholding or exemptions from FIRPTA. Then they work with title companies and buyers to ensure a smooth sale and represent sellers for the closing and receipt of funds. They also help sellers receive early returns of funds withheld under FIRPTA. Our goal is to analyze our clients’ individual needs and implement the most advantageous plan for complying with FIRTPA so that clients can retain the maximum amount of gains upon their disposition of U.S. real property.
