Did you know that in 2018 with the passing of the "TAX CUTS AND JOBS ACT OF 2017" the highest tax bracket of 37% begins at taxable income greater than $523,600 US (2021) for individuals and $628,300 US (2021) for couples filing jointly. The standard deduction will be $12,550 US (2021) for single filers and $25,100 US (2021) for married couples filing jointly. In addition, the Estate Tax Exemption has gone from $11,580,000 US (2020) for individuals and $23,160,000 US (2020) for a couple to $11,700,000 US (2021) for individuals and $23,400,000 US (2021) for a couple. The Foreign Earned Income Exclusion is $108,700 US (2021) for those who live outside the United States.
At Lintax Management Inc., we’re here to help with your USA and International financial questions. Located in Mississauga, our accountants are happy to assist both individuals and business owners with anything tax related.
I Am a Canadian Resident
If you are a Canadian resident, you can choose one property for any particular year as your principal residence, even one located in the US for tax purposes. As well, you can gift any amount of cash to an individual without tax consequences if used for personal use. If funds are used for investment purposes, income type is attributed back to the transferor.
I Am a United States Citizen
If you are a US citizen, a $250,000 US for a single person or $500,000 US per couple exclusion from income is given on the sale of a principal residence. You must have used the home in the preceding five year period with at least two years as a principal residence.
Investing Your US Funds
If you are using US funds for investment purposes, income type is attributed back to transferor. However, if you are considered a US resident, you can only gift $15,000 US or $30,000 US per couple for tax purposes. There is an unlimited exclusion for tuition and medical expenses.
What Are Situs Assets?
All assets located in the US are considered “situs”. Therefore, real estate owned by a Canadian corporation will not be exempt from US estate tax. Investments held inside a Canadian corporation (other than real estate) will not be subject to US estate tax.