Buying Real Estate in the U.S.: The Concise Guide for Canadians

Buying Real Estate in the U.S.: The Concise Guide for Canadians

by Dale Walters

Paperback(Second Edition, Second edition)

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If you are interested in owning US property, Buying Real Estate in the US: A Guide for Canadians will help you navigate the daunting legal and tax issues surrounding buying US real estate as a foreign buyer. This book will guide you on a safer, clearer, and more economical path to reaching your goal of owning US real estate, while avoiding the possible severe tax consequences and the many other complications that may arise in the process. The author covers information crucial for Canadian snowbirds becoming US property owners, such as US withholding tax, Nonresident US estate tax, and Income tax consequences If you find yourself more confused than certain when thinking about these issues. This book will empower readers to become confident and well-informed buyers, ready to face the US real estate market. The comprehensive and practical information in this book will ensure you experience the enjoyment rather than the hassle of becoming a US property owner.

Product Details

ISBN-13: 9781770402584
Publisher: Self-Counsel Press, Inc.
Publication date: 10/18/2016
Series: Cross-Border Series
Edition description: Second Edition, Second edition
Pages: 136
Product dimensions: 6.00(w) x 16.50(h) x 0.40(d)

About the Author

Dale Walters is partner and CEO of Keats Connelly, the largest North American cross-border wealth management firm. He hold a BS in Accounting, and is a Certified Public Accountant, Personal Financial Specialist, CERTIFIED FINANCIAL PLANNER™ Professional (US and Canada), and a NAPFA (National Association of Personal Financial Advisors) Registered Financial Advisor. He was named Top US Financial Planner by Mutual Funds Magazine in 2001 and 2002. He lives in Phoenix, Arizona.

Table of Contents

Introduction xiii
1 A Rare Opportunity 1
1. How the Opportunity Was Created 3
2. The Three Types of Real Estate Transactions 6
2.1 Traditional sale 7
2.2 Short sale 7
2.3 Foreclosure or bank-owned property 10
3. The Window of Opportunity 10
2 Ways of Owning Real Estate 13
1. Direct Ownership through an Individual or Individuals 16
Contents vi Buying real estate in the US
2. Types of Ownership 17
2.1 Community property 17
2.2 Community property with rights of survivorship 17
2.3 Ways to purchase an asset in common-law property states 18
3. Indirect Ownership Using Canadian Entities 20
3.1 Canadian corporation 20
3.2 Canadian limited partnership 21
3.3 Canadian inter vivos trusts 22
4. Indirect Ownership Using US Entities 22
4.1 Limited Liability Company (LLC) 23
4.2 US corporation 23
4.3 Revocable living trust 24
4.4 Limited Liability Partnership (LLP) and
Limited Liability Limited Partnership (LLLP) 25
3 Income Taxes 29
1. The Basics 32
2. Rental Income 35
2.1 Direct ownership 35
2.2 Indirect ownership 43
3. Selling the Property 55
3.1 Foreign tax credits 56
4. State Income Taxes 60
5. Sales Taxes 62
4 Nonresident US Estate Tax and Probate 63
1. Green Card Holders 66
Contents vii
2. As a Nonresident, When Are You Subject to
US Estate Tax? 67
2.1 The US-Canada Tax Convention (Treaty)
Article XXIX B (Taxes Imposed by Reason of Death) 69
2.2 How the US nonresident estate tax works 76
3. A Dollar Is Not Always a Dollar 80
4. Probate 83
4.1 State-specific rules of probate 85
5 Other Information You Should Know 87
1. Department of Commerce Filing Requirements 89
2. Overview of the Buying Process 90
2.1 Title insurance 96
2.2 Finding a real estate agent 96
2.3 US mortgages 97
2.4 Foreign currency 98
3. Hiring a Property Manager 100
Conclusion 103
Appendix I: Checklist for Buying Real Estate in the US 105
Appendix II: Resources 107
About the Author 111
viii Buying real estate in the US
1. Treaty-Based Return Position Disclosure (Form 8833) 33
2. US Nonresident Alien Income Tax Return
(Form 1040NR) 37
3. Certificate of Foreign Person’s Claim That Income Is
Effectively Connected With the Conduct of a Trade or Business in the United States (Form W-8ECI) 42
4. Application for IRS Individual Taxpayer
Identification Number (Form W-7) 44
5. Schedule K-1: Partner’s Share of Income,
Deductions, Credits, etc. (Form 1065) 46
6. Annual Return for Partnership Withholding Tax
(Form 8804) 49
7. Foreign Partner’s Information Statement of
Section 1446 Withholding Tax (Form 8805) 51
8. Partnership Withholding Tax Payment Voucher
(Form 8813) 52
9. Foreign Income Verification Statement (Form T1135) 53
10. Application for Withholding Certificate for
Dispositions by Foreign Persons of US Real
Property Interests (Form 8288-B) 57
11. Foreign Tax Credit (Form 1116) 58
12. United States Estate Tax Return (Form 706-NA) 78
13. Claim for Exemption (Form BE-15) 91
14. Questions to Ask Potential Property Managers 101
1. Summary of the Pros and Cons of Each
Ownership Type 27
2. Tax Filing Requirements 61
3. Which BE-15 Form to File 95

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