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Phil Hogan, CPA, CA, CPA (CO)
Cross-Border Tax and Investment Specialist
I’ve been watching your youtube videos to learn more about disposition of a foreign property. Could you please answer my questions? I would appreciate it so much.
Myself and my husband (Canadian residents) have 50% ownership on a property in Thailand with another owner who is a nonresident of Canada. The property has sold for 176,000CAD$. There are no capital gains on the property – there is a loss.
What are the tax implications on the money transfer into Canada? Can the money be transferred directly into our Canadian bank account? Does it matter that the proceeds of the sale are 50% to residents and 50% non-resident? Thank you so much. I have searched and searched and I am unable to find out what the implications of the transfer might be. Best regards.
Thank you so much.
Thanks for watching and supporting the YouTube channel.
I likely don’t have all the information required to answer all the questions below, but I’ll do my best to provide some general thoughts:
- I can’t speak to the taxation of the property from a Thailand perspective as I don’t have experience in that jurisdiction. Also, assuming you’re not paying tax on any capital gains in Canada applying for a foreign tax credit will not be required.
- You mentioned that you don’t have a gain for Canadian purposes but you should confirm that the gain calculation was done properly taking into consideration exchange rates for both the purchase and sale of the property on different dates
- For Canadian purposes you are still required to report the disposition and may be able to use the loss against any other gains. You can either apply the capital loss against other gains in 2022, carry the loss back 3 years or carry it forward indefinitely.
- Also note, that if the property was used as a rental and your original purchase cost was more than $100,000 CAD (your portion) the property should have been reported on form T1135.
- From a tax perspective bringing cash into the country should not attract additional tax or filing requirements. Assuming of course that the gain/loss has been properly calculated. That being said, there may be banking forms to complete.
- The other 50% owner would have specific requirement in their own home country.
- Also, as mentioned above I cannot speak to any reporting or income tax requirements for Thailand.
Hope that helps.