There are many areas of income taxable in the U.S., but not in Canada. Furthermore, there are a number of things that are taxed differently in the U.S. than in Canada.

Some of the most common problem areas for U.S. citizens abroad include:

1. Sale of a Principal Residence – The proceeds from the sale of a principal residence are NOT taxable in Canada but ARE taxable (subject to an exemption) in the U.S.

2. Deemed income – Subpart F

3. PFICs – This is your garden variety non-U.S. mutual fund.

4. Foreign Trusts – TFSA, etc.

This list is NOT complete.

The bottom line is that many U.S. citizens abroad do in fact owe U.S. tax.