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Title: Cardinal Point Wealth Management Cautions Cross-Border Taxpayers on Implications of Selling a Personal Residence

United States, 15th Nov 2025 – Cardinal Point Wealth Management has released an advisory explaining the U.S. and Canadian tax implications of selling a personal residence, especially for U.S. citizens living in Canada. While both countries offer exemptions to reduce capital gains taxes, individuals with cross-border status can face unexpected dual reporting requirements and significant U.S. tax exposure.For most Canadians, the sale of a principal residence is simple and tax-free. But for U.S. citizens residing in Canada, the same transaction can trigger a U.S. capital gains tax—even when the gain is fully exempt under Canadian law. Cross-border taxpayers are strongly urged to consider the potential tax liability before selling their home.United States: Principal Residence ExclusionThe Internal Revenue Service (IRS) allows taxpayers to exclude a portion of the gain from the sale of their principal home, if they have owned and lived in it for at least two of the previous five years. Single filers can exclude up to $250,000, and married couples up to $500,000. The exclusion can be used only once every two years and applies only to a primary residence.Any gain above these limits is taxable as a long-term capital gain, typically up to 20%, plus a 3.8% Net Investment Income Tax (NIIT) for higher earners.Canada: Principal Residence ExemptionIn Canada, the principal residence exemption (PRE) generally eliminates tax on gains from the sale of a qualifying home. A property is eligible if the taxpayer, spouse, or dependents “ordinarily inhabited” it during ownership. Only one property per family per year can be designated using CRA Form T2091(IND).Since January 1, 2023, properties owned for less than a year may be fully taxable unless a life event, such as death or job relocation,...

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