Canadian taxpayers must file a U.S. Income tax return for Nonresidents using form 1040-NR by June 15th of the subsequent year. The capital gains or losses are reported on the 1040-NR. Taxes withheld under FIRTPA are credited against the final tax calculated on 1040-NR. Any excess is refunded to the taxpayer.
The U.S. Capital gains rules are different than the Canadian ones. The applicable rates depend on the duration the property was held by the seller. Generally, gains resulting from the properties held for less than a year are taxed at the marginal rates, however, there are favorable rates for more than a year holding period. Further, there is a cap of US$3,000 on the capital losses that can be offset against ordinary income. Unlike Canada, there is no 50% deduction for capital gains in the U.S.
You should attach stamped form 8288-A as proof of FIRTPA withholding. If IRS did not send you the stamped (Copy B of) 8288-A due to missing ITIN, you need to attach evidence of withholding with your tax return.
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