Michael and Anna Dickson, (Canadian citizens), moved to Europe on October 20th, 2019 to open and incorporate a store in a small French village. Prior to moving, Michael earned $75,000 in 2019 as a computer programmer and Anna earned $72,000 in 2019 as a registered nurse. (The couple did not have any other income besides their salaries prior to moving.)

They are both in their 60s and plan to retire in France, which is Anna's birthplace. They sold their home prior to moving to Europe. As the couple only expects to return to Canada every second year, they canceled their bank accounts and driving licenses. Their store was successful in 2019 and earned a pre-tax profit of $35,000 by year's end.

Required:

Determine the residency status of Michael and Anna and their store for Canadian tax purposes in 2019 and discuss the Canadian tax treatment, if any, of their personal and business income. (Assume there were no assets with realizable gains upon their move.) Show your work to justify your answers.

Answer rating: 100% (QA)

Determine the residency status of Michael and Anna and their store for Canadian tax purposes in 2019 and discuss the Canadian tax treatment if any of their personal and business income Assume there we... View the full answer