Answers · Topic 9 of 10
US Real Estate, Investments and Trading answers.
Owning US property, holding US investments, trading and crypto as a Canadian: withholding, elections, estate exposure and how gains are taxed. 20 questions, each answered in the first paragraph.
By the AnalytIQ Accounting team · Last reviewed: September 6, 2026
Can the CRA tax my TFSA for day trading?Yes.Do Canadians pay capital gains tax when selling US property?Yes, twice over, though a foreign tax credit stops it from being double tax.Do Canadians pay US tax on US dividends and stock gains?Dividends and capital gains are treated very differently.Do Canadians with US brokerage accounts need to file US taxes?Usually no.Do I need an ITIN to sell US property as a Canadian?Yes.How does the CRA tax income from a US LLC?The CRA treats a US limited liability company as a foreign corporation, regardless of how the IRS classifies it, which means a Canadian member is generally not taxed on the LLC’s income as it is earned but only when the LLC actually distributes a dividend.How is a US vacation home taxed for Canadians who do not rent it out?If you never rent it out, a US vacation home does not require an annual US federal income tax return, because there is no US income to report.How is cryptocurrency taxed in Canada?The CRA treats cryptocurrency as a commodity, not currency, so tax applies every time you dispose of it: selling for cash, trading one coin for another, spending it on goods or services, and earning it through staking or mining are all separate taxable events.How much US estate tax could a Canadian owe on a Florida condo?Without treaty relief, a non-resident who is not a US citizen only gets a US$60,000 exemption before US estate tax applies to US-situs assets like a Florida condo.Is day trading taxed as business income or capital gains in Canada?There is no bright-line rule; the CRA and the courts look at how you actually trade, weighing factors like how often you buy and sell, how briefly you hold positions, how much time and specialized knowledge you bring to it, and whether you trade on margin.Should a Canadian buy US real estate personally, through a corporation, or through an LLC?For a single vacation home or a small rental, buying personally, or jointly with a spouse, is the default that works for most Canadians: it is simple, it lines up cleanly with the Canada-US tax treaty, and it avoids the double taxation an LLC creates.Should Canadians hold US stocks in a TFSA or an RRSP?For a dividend-paying US stock, the RRSP is generally the better choice.What expenses can day traders deduct in Canada?What you can deduct depends entirely on how your trading is classified.What is a 1042-S and what do I do with it on my Canadian return?A Form 1042-S is a US information slip a payer, typically a brokerage, a US company or an online platform, issues to report US-source income paid to a non-resident and how much US tax was withheld on it.What is a Schedule K-1 and how do Canadians report it?A Schedule K-1 is the US slip a partnership, including a US real estate syndication or investment fund structured as a limited partnership, issues to each partner showing their share of the partnership’s income, deductions, gains and credits for the year.What is FIRPTA withholding and how do Canadians reduce it?FIRPTA is the US rule that forces the buyer of US real property to withhold a share of the gross sale price whenever the seller is a non-resident, including a Canadian, and send it to the IRS as a deposit against the seller’s eventual US tax.What is Form 8288-B and how does it reduce FIRPTA withholding?Form 8288-B is an application to the IRS for a withholding certificate that lets a foreign seller of US real estate reduce FIRPTA withholding down to the actual maximum tax that could be owed, instead of a flat percentage of the gross sale price.What is the 871(d) net election for Canadians with US rental property?The 871(d) net election is a choice, made on your US non-resident return (Form 1040-NR), to have US rental income taxed on the net profit at graduated rates rather than at a flat 30% of gross rent.What is the superficial loss rule in Canada?The superficial loss rule denies a capital loss when you sell property at a loss and you, or an affiliated person such as a spouse or your own RRSP or TFSA, buys the identical property within 30 days before or after the sale and still holds it 30 days after.Which exchange rate do I use to report US rental income on my Canadian return?For ongoing rental income and expenses, the CRA accepts either the Bank of Canada exchange rate on the date each amount was received or paid, or the annual average rate for the year, as long as you apply the same method consistently from year to year.
Where we do the work
Rules at a glance · US Real Estate, Investments and Trading
Not sure which applies to you? Get a free proposal or book 15 minutes.
Key form1040-NR + 8288-BSelling US property needs an ITIN, Form 8288-B to cut FIRPTA withholding, and a 1040-NR filing.
Threshold15% FIRPTABuyers withhold 15% of the gross US sale price unless a reduced rate or exemption applies.
Watch forLLC double taxA US LLC is transparent to the IRS but a corporation to the CRA, so income gets taxed twice.
ReportingT1135 over $100kUS stocks, rental property and brokerage accounts above $100,000 cost must be reported to the CRA.
What we take off your plate
Cross-border tax for Canadians with US property or investments, handled.
- FIRPTA withholding, Form 8288-B and the 1040-NR filed as one file
- The 871(d) election made every year so US rental tax lands on net income
- Canadian and US returns prepared by one team
- Treaty positions and foreign tax credits lined up
- FBAR and T1135 foreign reporting
- ITIN applications certified in-house
Mistakes we fix
Three things that go wrong for Canadians with US property or investments.
- Buying US rental property through an LLC and creating a Canada-US tax mismatch
- Missing the 871(d) election and paying 30% tax on gross US rental income instead of net
- Leaving US stocks in a Canadian brokerage off the T1135 because the account itself is Canadian
Recognise one? Book a call and we will tell you what it is costing you.
How we can help · US Real Estate, Investments and Trading
Where we do the work.
Fixed fees, quoted after a short discovery call. Canadian and US filings under one roof.
Cross-border taxFIRPTA withholding, the 1040-NR and the Canadian T1135 filed as one file, not three accounts.Cross-border tax →Tax servicesForeign tax credit and T1135 reporting matched to what the US return already taxed.Tax services →Advisory & CFOPersonal, corporate or LLC ownership priced out before you sign, not after a mismatch appears.Advisory & CFO →
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A fixed fee for your cross-border tax work, in writing.
- Tell us about your business. The form takes about a minute.
- A short discovery call. Fifteen minutes to confirm what you need.
- A fixed fee in writing. We reply within one business day. No hourly surprises.
- Canadian and US filings under one roof
- Cloud-first: QuickBooks Online, Dext, Wagepoint
- Brampton, Ontario, with clients across Canada and the US
Answers
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