U.S. Income Tax

Many of Canadian taxpayers maintain a second home, a vacation property, or hold a U.S. real property interest for investment purposes. In 2020 and 2021, there is an upward trend of dispositions of U.S. real properties by Canadians. This article is focused primarily on the Individual Canadian taxpayers disposing of U.S. property interest, and not on owning the U.S. property. Further, due to the...

This article focuses on the limited emigration issues specific to shareholders of CCPCs related to their shares. Due to the complex nature of residency issues and tax implications, readers must exercise extreme caution while relying on limited resources on the internet. Every taxpayer has its unique circumstances and should consult a professional tax accountant specializing in tax residency...

Global Intangible Low-Taxed Income – Simplified! The Tax Cuts and Jobs Act of 2017 (TCJA) brought some major changes for U.S. taxpayers. The Global Intangible Low-Taxed Income (GILTI) regime was enacted to tax the U.S. Shareholders of Controlled Foreign Corporations (CFC) on a current basis. TCJA introduced Transition tax and GILTI. Transition tax (Sec 965) is a one-time tax on the...

The Internal Revenue Service (IRS) has extended the deadline to file Individual income tax returns for 2020 in the U.S. The new deadline is now May 17, 2021 (the usual deadline is April 15 every year). Deadline is extended for both filing and payment of taxes, and applicable to individual taxpayers only. This includes the individuals who pay self-employment taxes as well. There is no...

A hybrid entity is an entity that has different tax treatments in different countries. The typical examples of these entities are US Limited Liability Company (LLC), Limited Liability Partnership (LLP) or Limited Liability Limited Partnerships (LLLP). We have previously published a high-level overview of the taxation of US LLCs in Canada. This post is an attempt to further explain why using...

Cryptocurrency is the buzzword of 2021. If you’re an investor, not a single day goes by without a headline about bitcoin popping up in the newspaper, a tweet about cryptocurrency going viral, or your investor friends singing the praises of blockchain technology. It is hard not to get involved, and it is never too late to learn. Know about basic ideas and concepts behind cryptocurrency here. If...

Effective February 12, 2021, the Internal Revenue Service (IRS) has begun receiving 2020 tax returns in the U.S. In 2020, the American have moved to Canada in record numbers. Whether you have recently moved to Canada or have been living here for a while, there are a couple of things to know when it comes to your tax obligations. Disclaimer: This post is for general information purposes and...

The Internal Revenue Service (IRS) issues an Individual Taxpayer Identification Number (ITIN) for federal tax purposes. If you have the U.S. tax filing requirement and do not have a Social Security Number (SSN), you need an ITIN to file your income tax return. The IRS does not issue ITIN to whoever applies for it. There are strict rules and processes to be followed for the ITIN to be issued....

As we are in the final quarter of 2020, many wonder if they are subject to U.S. Income taxes due to the travel restrictions earlier in the year! Good News: Yes, there is an exception available! Generally, if you meet the substantial presence test (SPT), you are subject to U.S. income tax filing requirements. May Canadians spend a significant portion of the year in the U.S. especially in...

It is not unusual for Canadian businesses to expand into the United States. U.S. and Canada have two different tax systems and such a decision needs careful planning and consideration. In this post, we are going to have a quick overview of different structures that can be adopted by Canadian businesses to operate in the United States. This post is meant to be a simplified version for readers...