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prob002 - rented on a one-year lease Cathy and her husband...

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Problem 2 (Past exam question: 18 minutes) (Text: Ch. 2) Cathy was born and raised in Canada. She resided in Canada continuously until May 1, of this year. Cathy was the Vice President, Marketing of a retailing operation in Canada. Her employer has transferred her to its U.S. parent corporation for additional experience, intending for her to return to Canada in approximately two years to become President of the Canadian corporation. Cathy left Canada on May 1, to begin her U.S. employment. Cathy left her husband and two children, ages 10 and 12, in Canada to finish the school year. Cathy and her husband listed their house for sale in April with the hope of closing a sale after June 15, when the current school year was finished. Her family would then join her in the U.S. Cathy and her husband became reluctant about selling their Canadian home. As a result, they decided to rent the house for the two-year period they would be away. Cathy's husband and children remained in Canada until September 1, when the house was finally
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Unformatted text preview: rented on a one-year lease. Cathy and her husband also have a cottage in Canada which they will visit for approximately four weeks each summer while they are living in the U.S. The family took all of their furniture and personal belongings to the U.S. on September 1 when they joined Cathy in the U.S. Cathy took her car and clothing with her on May 1. Cathy has retained her golf club membership at her club in Canada since she did not want to forfeit the large initiation fee which she paid only three years ago. Cathy has an RRSP in Canada which she will keep. She has closed all of her Canadian bank accounts with the exception of one bank account into which the rent on the Canadian house will be deposited. The tenants have been advised that they should remit 25% of the rent to The Canada Revenue Agency (CRA) as a non-resident withholding tax. Required : Evaluate whether, during this year, Cathy became a non-resident of Canada for income tax purposes....
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