Solution%20to%20Assignment%20Problem%20Ch20

Solution%20to%20Assignment%20Problem%20Ch20 - Solution to...

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Solution to Assignment Problem Twenty - 1 Solution According To Textbook Mr. Leduc would be considered a part year resident and would only be assessed for Canadian income taxes on worldwide income during the portion of the year prior to his ceasing to be a resident of Canada. IT-221R3 indicates that, in general, the CRA will view an individual as becoming a non-resident on the latest of three dates: The date the individual leaves Canada. The date the individual’s spouse or common-law partner and dependants leave Canada. The date the individual becomes a resident of another country. While Mr. Leduc departed from Canada on February 12th, he will be considered a Canadian resident until his family’s departure on June 20th. The fact that his family remained in Canada would lead to this conclusion. While not essential to this conclusion, the fact that he did not sell his Canadian residence until that date would provide additional support. His Canadian salary from January 1 to February 11 would be subject to Canadian taxes. In addition, his U.S. salary for the period February 12th through June 20th will be subject, first to U.S. taxes, and then subsequently to Canadian taxes. In calculating his Canadian taxes payable, he will receive a credit for the U.S. taxes which he has paid on this income. However, because Canadian tax rates at a given income level are usually higher than those which prevail in the U.S., it is likely that he will be required to pay some Canadian income taxes in addition to the U.S. taxes. Note To Instructors The preceding solution reflects the content of the text with respect to departures from Canada and students should be evaluated on that basis. However, IT-221R3 qualifies the general departure rules as follows: Paragraph 15 An exception to this will occur where the individual was resident in another country prior to entering Canada and is leaving to re-establish his or her residence in that country. In this case, the individual will generally become a non-resident on the date he or she leaves Canada, even if, for example, his or her spouse or common law partner remains temporarily behind in Canada to dispose of their dwelling place in Canada or so that their dependants may complete a school year already in progress. On the assumption that Mr. Leduc was a resident of the U.S. prior to his working years in Canada, this exception would mean that he would cease to be a resident of Canada on February 12, the date that he departs from Canada.
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Solution to Assignment Problem Twenty - 2 Case A Martin Judge would be considered resident in Canada for the part year beginning October 1, 2010 and would be taxed on his worldwide income for this period. This conclusion is based on the assumption that he did not become a resident of Canada until he returned to Canada and began working at his new position. Case B
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This note was uploaded on 01/31/2011 for the course MOS 4462 taught by Professor Ann during the Fall '10 term at UWO.

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Solution%20to%20Assignment%20Problem%20Ch20 - Solution to...

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