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French-Canadian snowbirds Pierrette Bolduc and Gisele Barbeau relax on Hollywood Beach in Florida last year
French-Canadian snowbirds Pierrette Bolduc and Gisele Barbeau relax on Hollywood Beach in Florida last year

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Snowbirds: What you should know before heading south Add to ...

Every winter, many Canadians ditch the cold and ice and head south to enjoy the sunny skies, warm waters and lush golf courses found in places like Florida and Arizona. (Some estimates peg the number of Canucks who make the trip at up to 1.5 million per year.)

While relaxing on the beach sporting a Hawaiian shirt, sipping on a mojito can sure be relaxing, thinking about paying taxes, buying health insurance and trading currencies is anything but.

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Terry Ritchie is a certified financial planner with Transition Financial Advisors specializing in Canadian residents making the transition to the U.S. Group, Inc. He is co-author of The Canadian in America, The Canadian Snowbird in America and The American in Canada, all published by ECW Press Canada.

Terry recently appeared in three Let's Talk Investing videos with Rob Carrick, where he offered advice on exchanging currencies, choosing insurance and buying real estate in the United States.



Watch Terry Ritchie's Let's Talk Investing videos:

  1. Related contentCurrency trading tips (video)
  2. Related contentHealth insurance tips (video)
  3. Tips for buying U.S. real estate (video)




Terry Ritchie is currently the only Financial Advisor in North America to be Board Registered and Certified in Financial Planning in both Canada and the United States and to be enrolled to practice before the U.S. Internal Revenue Service (IRS) as an Enrolled Agent (EA). Terry is also a Trust and Estate Practitioner (TEP) affiliated with the Society of Trust and Estate Practitioners (STEP).

Terry has been practicing in the areas of financial, investment, tax and estate planning for over 20 years. With practices in Arizona for 13 years (1983 - 1995) and having practiced in Calgary, Alberta since 1996, Terry is uniquely qualified to deal with financial matters of Canadians and Americans in either country. He has consulted on behalf of individuals, major corporations, various legal and financial professionals and professional athletes on either side of the border.





Terry Ritchie took reader questions in a live discussion. Thanks to everyone who submitted them.

Read through the questions and answers below, or scroll down and click on the Cover It Live box to read through the discussion as it appeared during the live hour.







Jeremiah: I've been renting condos in Florida for the past couple of winters. Whenever I cross the border, I get asked whether I rent or own. Why do they need to know?

Terry Ritchie: The folks at the border can ask you a lot of various kinds of questions. You must answer all questions honestly. My sense is that they are trying to determine whether your intentions might be to live in the US on a longer term basis than allowed under US Immigration rules. If you are not a US citizen or hold a US green card, you are only entitled to be in the US for no longer than 6 months in a calendar year. In my book, I discuss the role of a "border binder". You might want to create such a binder to address these issues if they come up again.

Joe: Crossing the border, in regards to Jeremiah's question, border guards (US) are getting more detailed. What proof should we have that we do own US property?

Terry Ritchie: You do not have to give them anything unless they ask. Ideally, you really want to support that you are a Canadian resident and will not be living in the US beyond your time restrictions under the B-2 Visa (Pleasure Visitor) that will be assigned to you. Obviously, if you want or need to support that you own property in the US, a copy of your title certificate would help. If you are renting the property and filing a US tax return (Form 1040NR) as required, that would be helpful as well.



Mike: Hi Terry. What are the tax consequences for purchasing a condo in Florida it will be 6 months rented and 6 months used for personal use?

Terry Ritchie: There are no US income tax issues upon the purchase of US real estate. US income tax implications come into play when you either rent or ultimately sell the property. If you are renting the property for 6 months, you will have to file IRS Form 1040NR along with Schedule E to include gross rents and the related expenses from the property. Under US rules, the property must also be depreciated (Straight Line basis over 27.5 years). As a Canadian resident, you should also report the rental activity on Form T776 of your T1. Since you will be using personally as well, you can only deduct expense related to the rental time period.

Mike: I am looking at purchasing a condo in Florida either in Miami or Clearwater areas. What are the tax consequences? I understand there is an additional property tax for foreign investors in the State of Florida?

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