Do I have to file at home while living in Nepal?
Residence decides it, and residence is a question of facts rather than of where your post arrives. The one exception is US citizenship, which carries the filing obligation with the person wherever they go. So the first thing we establish is which system still claims you.
Is there a treaty between my country and Nepal?
That is verified rather than assumed: we confirm which treaty text governs Nepal and your home country for the year in question, because a protocol can move a rate or an article between years. If there is no treaty, unilateral credit rules are what prevent double taxation.
I own property in Nepal. Where is the rent taxed?
In Nepal, because that is where the property sits. The complication is the base: gross-rent withholding takes no account of mortgage interest, tax or repairs, so a leveraged property can face tax on turnover. An election onto net profit, where it exists, is what fixes that — and it has its own timing.
Do I have to tell Canada about my family's business in Nepal?
Usually yes, and the trigger is ownership rather than income. A share in a Nepali company held by a resident of Canada can make that company a foreign affiliate for home-country reporting, and the reporting obligation attaches to the holding itself. It does not wait for a dividend, and it does not go away because the company reinvests everything locally or because a relative runs it day to day. The first thing we establish is what you actually own on paper, what the family understands you to own, and whether those two agree. Where they do not, the paperwork is fixed before any return is filed.
I inherited land in Kathmandu — is it taxable in Canada?
Receiving an inheritance is not itself an income event at home. What follows it can be. You take on the property with a cost to measure, and a later sale is measured against that cost, so the value at the date you acquired it is worth documenting now rather than reconstructing years later. Reporting of foreign holdings turns on whether the property is held to earn income or kept for personal and family use, which is a distinction worth settling in writing at the outset. Translated deeds, the succession paperwork and a contemporaneous valuation are the file that makes the eventual sale straightforward.
My salary is paid in Nepal but my family lives in Toronto?
Then residence is the question, not the payslip. Where your spouse and children live, where your home is kept available to you, and where your personal and economic life is centred carry more weight than the country that issues the pay. If home-country residence continues, that country taxes your worldwide income and the Nepali tax paid becomes something to relieve rather than something that settles the matter. Whether relief comes through a treaty or only through the domestic foreign tax credit rules is confirmed for your year rather than assumed. We settle residence first, because every other answer on this page follows from it.
Can I transfer money from Nepal to Canada without paying tax on it?
Moving your own funds across a border is not by itself a taxable event. The transfer is a banking act, not an income event. What matters is the earlier question of whether the money was taxable when it arose, and whether it was reported then. Sale proceeds, rent, business profits and distributions each have their own answer, and a large inbound transfer with no explanation behind it is exactly what invites a later query. We would rather document the source once, at the time, than assemble it under a deadline afterwards. Keep the sale deed, the bank advice and the remittance paperwork together.
Do I need to report a Nepali bank account to the IRS?
US persons report foreign accounts on the basis of the account existing, not on the basis of it earning anything. An FBAR is about accounts you own or can sign for, so a dormant account, an account opened for a parent's convenience, and an account you merely hold signature authority over can all be reportable while producing no income at all. Joint family accounts are the ones most often missed in this corridor, because nobody thinks of them as theirs. Listing every account you can sign for, including those you consider your family's, is the honest starting inventory.
The family shop in Nepal is registered in my name — am I the owner?
For tax purposes that depends on whether you hold legal title only or hold it beneficially. Registering a business or a plot in a son's or daughter's name while the parents run and fund it is common here and is not by itself a transfer of the economic interest. But a home-country tax authority reads the register first and asks questions afterwards, so the position needs to be capable of being explained with evidence rather than with family understanding. We look at who put in the capital, who takes the profit and what the local documents actually say, then record the conclusion before it is ever tested.
When is Form 1116 required?
Whenever you want a credit for foreign income tax on a US return and you do not qualify for the small-amount election. Filling it out means putting each foreign amount in its category and working the limitation, not copying a figure off a slip. The form does the arithmetic the credit turns on: it puts the foreign income into its category, works out the US tax attributable to it, and caps the credit at that figure. Without the form there is no limitation computation, and without a limitation computation there is no carryover to use in a later year. See Form 1116.
Do I owe state income tax if I live abroad?
Possibly, and it is the part Americans abroad most often miss. States are not parties to tax treaties, several do not follow the federal foreign earned income exclusion, and liability generally follows domicile rather than physical presence. A driver's licence, a voter registration, a home kept available and a mailing address are the facts a state weighs. Some states have no income tax at all, which is why the last state you were domiciled in matters so much. See state residency and domicile.
