Filing a nonresident return after deemed disposition - T1161 T1243 T1244 - international non-resident cross border income t

My_question_is: Canadian-specific
Subject:        Filing a nonresident return
Expert:         taxman@centa.com
Date:           Friday March 09, 2007
Time:           12:38 AM -0500

QUESTION:

Hi,
I did a deemed disposition as of jan 1 2005, and liquidated all my canadian investments in 2006.

This year, I received:
an NR4 and a T2062 for my life insurance policy
(the NR lists gross income but no withheld tax)
a t5 (?) for interest income
a mutual fund t5008 for securities I sold

I know how to show the interest income, but am not sure a) why I got an NR4 and a T2062 on the life insurance. How does one show this on their return?

Lastly, my understanding is that my tax obligation to canada on capital gains on the mutual funds is complete, and I just show those now on my US return. Is this accurate?

Thanks,

-------------------------------------------------------
 
david ingram replies:

Assuming that you filed your T1161 and T1243 and paid the tax on the deemed disposition, you are finished,.

However, if you also filed form 1244 to defer the tax until actual sale, you would need to pay that tax now that you have sold it. 

The T5 implies that no tax was withheld.  Technically, you need to file a tax return under article XI of the US Canada Tax Treaty to pay 10% tax on the interest.

However, most of the time, you would just send the CRA a cheque for 10% and a copy of the T-5.and forget about the T1.

Then, on the 1040, you would report the interest again, the actual mutual fund sales and have to decide if there was a taxable portion to the life insurance policy between the time you left Canda and the cashed in time.  You would then claim  the 10% tax on the interest on US form 1116 with your 1040.
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Phone consultations are $400 for 15 minutes to 50 minutes (professional hour). Please note that GST is added if product remains in Canada or a phone consultation is in Canada.
 
This is not intended to be definitive but in general I am quoting $800 to $2,800 for a dual country tax return.
 
$800 would be one T4 slip one W2 slip one or two interest slips and you lived in one country only - no self employment or rentals or capital gains - you did not move into or out of the country in this year.
 
$1,000 would be the same with one rental
 
$1,200 would be the same with one business no rental
 
$1,200 would be the minimum with a move in or out of the country. These are complicated because of the back and forth foreign tax credits. - The IRS says a foreign tax credit takes 1 hour and 53 minutes.
 
$1,500 would be the minimum with a rental or two in the country you do not live in or a rental and a business and foreign tax credits  no move in or out

$1,600 would be for two people with income from two countries

$2,800 would be all of the above and you moved in and out of the country.
 
This is just a guideline for US / Canadian returns
 
We will still prepare Canadian only (lives in Canada, no US connection period) with two or three slips and no capital gains, etc. for $150.00 up.
 
With a Rental for $350
 
A Business for $350 - Rental and business likely $450
And an American only (lives in the US with no Canadian income or filing period) with about the same things in the same range with a little bit more if there is a state return.
 
Moving in or out of the country or part year earnings in the US will ALWAYS be $800 and up.
 
TDF 90-22.1 forms are $50 for the first and $25.00 each after that when part of a tax return.
 
8891 forms are generally $50.00 to $100.00 each.
 
18 RRSPs would be $900.00 - (maybe amalgamate a couple)
 
Capital gains *sales)  are likely $50.00 for the first and $20.00 each after that.
 
Just a guideline not etched in stone. 
 
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