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Tag: foreign exchange

  • When are costs for a U.S. property tax-deductible in Canada? – MoneySense

    When are costs for a U.S. property tax-deductible in Canada? – MoneySense

    It sounds like you sold or are planning to sell a property in the U.S., Bob. To cut to the chase, selling costs, like a realtor commission, would be deductible on your Canadian tax return.

    This assumes the property is taxable, which is typically the case for a foreign property. Interestingly, a property outside Canada can qualify as your principal residence. But this would be unusual for a Canadian resident, whose Canadian home would typically be more valuable than a foreign one, and therefore, more appealing to claim as your principal residence.

    Do you have to report the sale in Canada?

    Assuming the property in question is a vacation or rental property, the sale would be reported on your Canadian tax return. In addition to your selling costs, Bob, your acquisition costs, including legal fees, renovations or improvements, can reduce your capital gain.

    Your capital gain would be calculated based on your net sale proceeds minus the acquisition cost, including renovations. You have to convert these amounts from U.S. dollars to Canadian dollars based on the applicable exchange rates.

    The Canada Revenue Agency (CRA) says you should report foreign income or expenses based on the Bank of Canada exchange rate on the date of the transaction. It will accept a different rate for the transaction date if the source is:

    • Widely available
    • Verifiable
    • Published by an independent provider on an ongoing basis
    • Recognized by the market
    • Used in accordance with well-accepted business principles
    • Used to prepare financial statements (if any)
    • Used regularly from year to year 

    Bloomberg L.P., Thomson Reuters Corporation, and OANDA Corporation meet these criteria and are “generally acceptable” to use, according to the CRA.

    U.S. tax implications of selling property in the U.S.

    The U.S. property sale will also have U.S. tax implications, even if you’re not a U.S. citizen. When a Canadian sells real estate in the U.S., they must file a U.S. tax return with U.S. capital gains tax potentially payable. This is a common requirement in other countries as well.

    The U.S. tax paid can qualify as a foreign tax credit to reduce your Canadian tax payable, Bob, to avoid double taxation.

    Jason Heath, CFP

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  • Wise card Canada review 2024 – MoneySense

    Wise card Canada review 2024 – MoneySense

    Is the Wise card a credit card?

    Often referred to as the Wise credit card, the Wise card is actually a prepaid card available to residents of Canada and dozens of other countries. To use the card, you must have funds loaded into your Wise account. What makes Wise appealing is that it allows you to hold multiple currencies. That means you could potentially purchase some foreign dollars when the exchange rate is in your favour and then spend it as needed when you’re abroad. 

    No additional fees apply when making purchases with a currency you currently hold in your Wise account. However, if you don’t hold the currency in which you’re making a purchase, Wise will automatically deduct the funds from the currency in your account with the lowest conversion fees. That said, when making a purchase abroad and given the option to be charged in the local currency or Canadian dollars, always choose the local currency for the best exchange rate.

    The Wise card also allows you to withdraw money from ATMs while abroad. Think of it as a Wise debit card, since you can use it for purchases and ATM withdrawals. Oddly enough, you can’t use the card within Canada.

    The first two ATM withdrawals are free, up to a cumulative value of CAD$350 per calendar month. Any additional withdrawals will cost you $1.50 each, and a 1.75% fee will be added to amounts over $350. Also, note that the ATM provider may charge its own fee when you withdraw cash. Wise withdrawal fees and third-party ATM fees count towards your withdrawal limits—so plan accordingly.

    How long does it take to get a Wise card?

    You must have a Wise account if you want to apply for a Wise card. The registration process only takes a few minutes and is done completely online. Once your account is active, you need to add funds. Doing so is simple, as you have many options including Interac e-Transfer, direct debit from your bank, and wire transfer. 

    Each loading method has a fee. Interac e-Transfer typically has the lowest fee, and your money will arrive in about five minutes. How much you’ll pay in fees depends on the currency and how much you’re loading.

    To order your Wise card, log into your account and click on Wise Card on the side bar. The physical card will arrive within 14 days, and you also get a digital card you can use immediately. While the digital option is convenient, it won’t help people who are travelling soon and may need ATM access.

    Wise card pros and cons

    The Wise card is a unique option that many people will naturally be attracted to. That said, you should consider the pros and cons before you open an account.

    Barry Choi

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