Sandra DaCosta

Sandra DaCosta Canada and US exit and entrance tax consultations and consulting. Tax return preparation including non-resident and part year resident returns and forms.

Dacosta CPA Professional Corporation, Tax Consulting, Expat Tax, Residency, Non-resident, Rental, Small Business, Canada/US Cross-Border Tax Preparation, CPA, EA (U.S.)🇨🇦🇺🇸 Tax education and training services.

They wonder why it’s so difficult to attract top talent to Canadian sports teams. In this case the players did win.Forme...
09/01/2026

They wonder why it’s so difficult to attract top talent to Canadian sports teams. In this case the players did win.

Former Toronto Blue Jays all-stars Josh Donaldson and Russell Martin have won their court battle with the CRA as an appeal court confirmed they do not owe taxes on millions of dollars of income. As a result, both players won’t have to pay additional taxes, as claimed by the tax agency.

In this case, the CRA challenged how much income the players could deduct from their taxes using contributions to a pension plan called a Retirement Compensation Agreement (RCA).

The full story from the National Post is here: https://nationalpost.com/news/politics/ex-blue-jay-stars-sweep-doubleheader-in-multi-million-dollar-tax-battle-against-feds

They wonder why it’s so difficult to attract top talent to Canadian sports teams. In this case, the players did win.Form...
09/01/2026

They wonder why it’s so difficult to attract top talent to Canadian sports teams. In this case, the players did win.

Former Toronto Blue Jays all-stars Josh Donaldson and Russell Martin have won their court battle with the CRA as an appeal court confirmed they do not owe taxes on millions of dollars of income. As a result, both players won’t have to pay additional taxes, as claimed by the tax agency.

In this case, the CRA challenged how much income the players could deduct from their taxes using contributions to a pension plan called a Retirement Compensation Agreement (RCA).

The full story is here: https://nationalpost.com/news/politics/ex-blue-jay-stars-sweep-doubleheader-in-multi-million-dollar-tax-battle-against-feds

I often get asked what a U.S. FBAR is and why U.S. persons need to file one. This post is not to answer what an FBAR is ...
08/27/2026

I often get asked what a U.S. FBAR is and why U.S. persons need to file one. This post is not to answer what an FBAR is but instead to explain why an FBAR must and should be filed when a U.S. person meets the $10k USD filing threshold, using a real world example. If you want an explanation of what an FBAR is, there’s other posts on my social media feed about that.

The U.S. Court of Appeals recently ruled that a surgeon and his wife must pay approximately $1 million in penalties and interest after failing to report their Swiss bank account to the IRS.

The court held that under the Bank Secrecy Act, “willful” failure to file an FBAR (Report of Foreign Bank and Financial Accounts) includes both intentional and reckless conduct, reinforcing a standard consistent with other circuits.

This is just one example of a very expensive court ruling. There are other examples and I usually forward an FBAR court ruling link to my leads/clients when they ask me “but how would the IRS or U.S. Department of Treasury find out about my offshore bank account(s)”. I don’t know about you, but for me I would rather be compliant with filing those forms accurately and completely versus dealing with $10k USD or way more costly penalties.



https://news.bloombergtax.com/daily-tax-report/hiding-swiss-bank-account-from-irs-ruled-willful-on-appeal

This is a complex cross border tax case. Article XVI, paragraph 4 of the U.S./Canada Tax Treaty states that intellectual...
08/19/2026

This is a complex cross border tax case. Article XVI, paragraph 4 of the U.S./Canada Tax Treaty states that intellectual or athletic “inducements” derived by a resident of a contracting state from activities exercised in the other state can be taxed in that other state, but the tax is generally limited/capped at 15% of the gross amount of the payment.

The CRA is arguing that large signing bonuses or structural incentive payments are not true independent “inducements,” but rather disguised regular salary or standard employment income. If classified as regular employment income, it becomes fully taxable at Canada’s top marginal tax rates rather than qualifying for the lower 15% treaty cap.

The most important question with this case is the definition of “What is an inducement? But the answer is not so straightforward. Tavares was likely a U.S. resident at the time of signing with the Leafs and already paid 15% to the U.S. If Tavares loses, he will most likely seek relief from the U.S. to avoid double taxation.

I hope Tavares wins for two reasons. Reason 1: there is nothing in the treaty about how an “inducement” should be paid. If CRA (or our gov) wants to better define “what an inducement is” and “how an inducement is paid”, then perhaps the Canada-U.S. Tax Treaty bilateral agreement should be revisited and properly defined. Reason 2: if he doesn’t win, this will scare away other pro athletes from signing with Canadian professional sport teams.

Selling a Canadian Principal ResidenceOne of the biggest misconceptions I see in cross border tax is when a U.S. person ...
08/18/2026

Selling a Canadian Principal Residence

One of the biggest misconceptions I see in cross border tax is when a U.S. person assumes their Canadian principal residence home is safe from tax. Selling a Canadian principal residence while you are a U.S. resident may create a U.S. tax-reporting obligation because U.S. residents are generally taxed on worldwide income, including gains from foreign property. Remember that U.S. citizens and green card holders are considered U.S. residents no matter where they live.

The U.S. imposes different rules with respect to the sale of principal/main homes, and as such, it is possible for a portion of the sale in Canada to be taxable in the U.S. In the U.S. if you have a capital gain from the sale of your main home, you may qualify to exclude up to $250,000 of that gain from your income, or up to $500,000 of that gain if you file a joint return with your spouse. Publication 523, Selling Your Home provides rules and worksheets. In general, to qualify for the U.S. exclusion, you must meet both the ownership test and the use test.

You’re eligible for the exclusion if you have owned and used your home as your main home for a period of at least two years out of the five years prior to its date of sale. You can meet the ownership and use tests during different 2-year periods. However, you must meet both tests during the 5-year period ending on the date of the sale. Generally, you’re not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home.

Because the U.S. rules differ from Canada’s principal-residence rules, the Canadian tax result may not fully eliminate the U.S. tax. Before selling, confirm your U.S. residency status, calculate the gain in U.S. dollars, and review whether the ownership and use tests are satisfied. Contact our office if you have any questions.

08/06/2026

The most expensive tax advice is the one you get for “free”. Free advice comes with risk and unintended consequences. Beware of “free” tax advice on some social media channels. Consult with a credible professional before making any major moves.

07/28/2026

People will warn you about a depreciating car but nobody warns you about a depreciating life.

I don’t promote going into unnecessary financial debt to enjoy life but I also see clients who can afford to enjoy the little things (and the big things) but yet avoid all spending while life just passes them by.

Balance is key. Become financially secure. Wear the watch, take the trip and buy the car if you can afford to. I left my own work behind this afternoon to enjoy the sunshine and summer weather. 🙏

đź’° Can the CRA deny your foreign tax credit? A recent court case says not so fast. A Canadian taxpayer recently won a cou...
07/16/2026

đź’° Can the CRA deny your foreign tax credit? A recent court case says not so fast.

A Canadian taxpayer recently won a court case after the CRA denied foreign tax credits for taxes withheld on investment income earned in Germany and Switzerland.

Here’s why it matters:
➡️ Canadian residents pay tax on their worldwide income. If you’ve already paid tax in another country, you may be eligible for a foreign tax credit to help prevent double taxation.
➡️ In this case, the CRA argued that proof of tax withheld wasn’t enough and requested foreign tax assessments. The taxpayer couldn’t provide them because the income earned abroad wasn’t high enough to require filing tax returns in those countries.
➡️ The court ruled that the CRA’s position was inconsistent with its own published guidance, which generally accepts foreign tax slips as sufficient evidence when tax has been withheld at the source.

The takeaway: If you earn investment income from outside Canada, keep all your foreign tax documents. If the CRA questions your foreign tax credit claim, you may have stronger rights than you think. Cross-border tax rules can be complicated, but understanding them can help you avoid paying more tax than you legally owe.

đź“© Have questions about foreign investments or foreign tax credits? Reach out to a qualified tax professional before filing your return.

Link to this court case article is here: https://financialpost.com/personal-finance/taxpayer-double-taxed-home-abroad-wins-cra

07/08/2026

Under the new system, eligible taxpayers will no longer have to request penalty relief that the IRS says is routinely granted.

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