There was a very useful article published on Advisor.ca site. In simple terms it clarifies the situation with the American taxes that Canadians must pay when selling American real estate. Canadians who own property in the U.S. are not required to file U.S. tax returns unless the property generates rental income or they have other U.S.-sourced income in a given tax year. As a result, Canadians who have purchased U.S. properties as vacation homes are usually filing U.S. tax returns for the first time when they sell these properties, and potentially owe a capital gains tax to the IRS.
