1-800-265-3200
65
CSA TRAVEL INFORMATION GUIDE
of closing. This will speed up the time it would have taken for you to receive a refund for any
tax overpayment had the full 10% amount been deducted and remitted to the government. A
determination of a tax-payable amount by the IRS generally takes 4 to 6 weeks.
A similar issue surrounds death tax liability, should something happen to you. How the property is
registered on title could impact these two variables in the future.
For all financial and tax issues surrounding a property abroad, seek professional legal and accounting
advice before you buy.
Individual Taxpayer Identification Number (ITIN)
For Canadians who must file a U.S. tax return, you will need an identification number. Generally, this
is a U.S. social security number (SSN). If you were ever issued a social security number in the past,
you should use it. If you do not have an SSN, never use your Canadian social insurance number (SIN)
as a substitute. The SIN and SSN both contain 9 digits. You could be inadvertently accused of trying to
steal the identity of the American resident who owns the corresponding number.
A non-resident alien who does not have an identification number must apply for one. The substitute
for an SSN is an IRS individual taxpayer identification number (ITIN). ITINs are intended for tax use
only. They have no effect on being allowed to work or live in the United States. Information and the
necessary application forms can be obtained from the U.S. Internal Revenue Service.
Canadian buyers and sellers of U.S. real property interests may require an Individual Taxpayer
Identification Number (ITIN) to request reduced tax withholding when disposing of a property, and
to pay any required withholding under FIRPTA (Foreign Investment in Real Property Tax Act). As not
every seasonal property – based on its make-up or sale price – is subject to mandatory withholding
tax, it is important that you check with the local tax collecting office to determine if you require an
ITIN.
Transferees (buyers) and foreign transferors (sellers) of U.S. real property interests must provide their
ITINs, names and addresses on withholding tax returns, applications for withholding certificates,
notice of non-recognition, or elections when disposing of a U.S. real property interest. Individuals
must have a tax requirement and file a valid federal income tax return to receive an ITIN, unless they
meet an exception. ITINs are intended for tax purposes only. They have no effect on being allowed to
work or stay longer in the U.S.
ITIN first-time applicants must now:
1. Apply using
FormW-7 Application for IRS Individual Taxpayer Identification Number
.
2. Attach a federal income tax return to the
FormW-7
.
Applicants who meet an exception to the requirement to file a tax return must provide documenta-
tion to support the exception.
The IRS has streamlined the number of documents the agency will accept as proof of identity to
obtain an ITIN. There are now 13 acceptable documents. An original, or certified or notarized copy,
of an unexpired passport is the only document that is accepted for both identity and foreign status.
If you do not have a passport, you must provide a combination of current documents that contain
expiration dates - documents issued within 12 months of the application if no expiration date is
normally available are accepted. The documents must also show a name and photograph, and
support a claim of foreign status.