It is recommended that you seek a professional for tax advice. My intention is to try and answer in generalities and give you some topics to investigate further.
Whether you already own a property in Arizona and want to sell or you are considering a purchase here, there are some things to think about regarding taxation as a Canadian selling in Arizona. Foreign Investment in Real Property Tax Act (FIRPTA)
- If you plan on renting out your home here in AZ, you will be expected to pay a 30% income tax.
- When you sell there is a Withholding Tax of 10% of the Gross Contract Price; however, you don’t have to pay if: the sale price (gross contract price) is less than $300,000 and the person to whom you are selling plans to use it as a primary residence
- If your sales price is more than $300,000 then The Withholding Tax may be eliminated or reduced by filing an IRS form to obtain a Withholding Certificate. This form needs to be filed before the closing of your sale.
**right now 2015 this form is taking from 90-120 days to receive**
Here is a link you may find helpful as a reference:http//www.irs.gov/pub/irs-pdf/p515.pdf
As well as seeking the advice from a US tax specialist, my research has also shown several things to be aware of on the Canadian side as well – beyond the scope of this blog, but certainly your specifics make your implications specific to you!