`Pensions (including public pensions) and annuities derived from a State established in the other Contracting State shall be exempt from taxation in the first-mentioned State and, where such property (or property in respect of which such property has been replaced in an assignment, the profit not recognised for the purposes of taxation in the first-mentioned State) was held by the person, when she was no longer a resident of the first state. 3. For the purpose of determining the operating profit of a permanent establishment, the expenses incurred for the purposes of the establishment, including the administrative and administrative costs thus incurred, whether they are allowed as deductions in the State in which the permanent establishment is situated or elsewhere. This paragraph shall not require a Contracting State to permit the deduction of expenses which, by reason of their nature, are not generally accepted as an input deduction under the tax laws of that State. However, under U.S. law, a person can only claim up to $250,000 in capital gains for a principal resident, with the excess taxed at rates of up to 23%. To reduce this extreme taxation, it may be useful for the house to belong, for example, to a husband and wife. The U.S.-Canada tax treaty covers double taxation with respect to income tax and capital gains tax, but as already mentioned, the benefit is limited due to a savings clause for U.S. expats in Canada. 2. The competent authority of the State party to which the case has been submitted shall endeavour, if the objection appears to it to be justified and if it is unable to find a satisfactory solution itself, to resolve the case by mutual agreement with the competent authority of the other State party with a view to fiscal evasion which is not in conformity with the Convention.

Unless the provisions of Article IX (related persons) apply, any agreement concluded shall be transposed into the domestic law of the Contracting States, notwithstanding any limitation of time or any other procedure, provided that the competent authority of the other State Party has been informed of the existence of such a case within six years of the end of the fiscal year to which the case relates. “As part of the intergovernmental agreement, Canadian banks will try to identify the accounts of U.S. citizens and report them to the IRS through the Canadian Revenue Agency.” – Global News In fact, there are different tax credits that can be applied to their Form 1040 because they pay taxes in Canada that help avoid double taxation.