Chris PrefontaineSerious about making money in the real estate investment business? Free Webinar - REGISTER BELOW!, Smart Real Estate Coach · Chairman, Founder, 4x Best-Selling Author of "Real Estate On Your Terms," Forbes Business Council Member, 3x Inc 5000 Honoree, Global Rank TOP 0.5% Podcast Host

Taxes On Real Estate Investing Between The U.S. And Canada #shorts

8 Feb 2025 · 1 min

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0:31

In this short, Chris Prefontaine explains that while many U.S. investors use LLCs as pass‑through entities, the Canada Revenue Agency treats a U.S. LLC as a corporation for Canadian taxpayers. This mismatch means a Canadian investor would face U.S. personal income tax on the LLC’s earnings and Canadian corporate tax on the same income, resulting in double taxation. Prefontaine advises Canadian investors to choose structures that are taxed consistently in both countries—either both as corporations or both as pass‑through entities—so that foreign tax credits can be applied and double tax can be avoided.

Chapters

A lot of Americans will set up LLCs, but the problem with LLCs for Canadians is the way Canada Revenue looks at an LLC. So they look at it like a corporation, even though it's a flow-through entity and it's going to go to your personal taxes. So in the U.S., you'll pay personal taxes. In Canada, pay corporate taxes. You just pay double tax. So you want to have, you know, structures that line up, you know, that they're going to be taxed corporately, corporately, or personally, personally. And that way there's tax credits between the 2 countries and you're just not going to double pay. But if you cross them, it doesn't work.