[GRANOWSKI]

I'm frm canada (married an american March 07) I own 2 rental properties in Canada...
My rental properties are not for income I needed someone to rent them to pay the mortgage until I know if I was going to stay in the United States ( the rent I've rec'd has gone towards my morgage)

Question:

If my husband files our taxes jointly or separately (I've never worked in the states) do I (we) have to claim my 2 rental properties in Canada (as I will be filing my own taxes in canada)?

If so, what will I need (as far as paper work goes from canada)?

2ND Question:

If I were to sell my properties in canada and made some money off them (in 2008). Will we have to pay/claim that revenue here in the United States when we file our taxes next year (2008 taxes) Because I will have to pay tax on that in Canada... will we get dinged twice, in Canada and United states ?

Thank you very much for your time, and for your help/advise

[MukatA]

If you file as Married Filing Jointly, you must report the rental income. You can deduct mortgage payments as itemized deduction. If you paid any tax on rental income in Canada, you will claim credit for the taxes paid.

2nd: Yes you will report the sale of property in the U.S. on schedule D. The profit is taxable in the U.S. But you will get credit for the taxes paid in Canada. For this you will file form 1116 with your tax return.

[AtlantaTaxExpert]

The FIRST question was already answered. BOTTOM LINE: If you are a U.S. resident under a Green Card, you must report the income whether you file jointly with your spouse or separately.

SECOND Question:

Actually, you will report the sale on Form 4797, because the rental houses are considered BUSINESS properties. The actual tax is computed on Schedule D, however.

MukatA is correct about the Foreign Tax Credit under Form 1116.