US Taxation of Cdn mutual fund - Form 8621 - QEF - 8891 TDF 90-22.1 - Fred Snyder radio Program on CKBD 600AM -

david ingram replies:

Treat a T3 or a T5 as a 1099-Div or 1099. convert the figures to USdollars if in Canadian and put in the proper place on Schedules B and D.

Calculate the tax you paid to Canada and claim it as a foreign taxcredit on form 1116

There is no reason to fill out a form 8621 or QEF (Qualified ElectingFund) because the Canadian taxes will just about always wipe out anyUS tax by filing form 1116.

You can see Form 8621 here - http://www.irs.gov/pub/irs-pdf/f8621.pdf

Assuming all of your accounts total more than $10,000 US, you will thenfill out forms TDF 90-22.1 for every financial account including RRSP,RRIF and RESP accounts, AND any mother or father or sister or brother'sor company accounts yo may have signing authority over. See Question7 at bottom of Schedule B.

Form TDF 90-22.1 - http://www.irs.gov/pub/irs-pdf/f90221.pdf-

For your RRSP, RRIF and RESP accounts you should file form 3520. Thegood news is that for the RRIF and RRSP accounts you can substitute themuch easier form 8891.

Form 8891 - http://www.irs.gov/pub/irs-pdf/f8891.pdf

The penalties for failure to file these forms are immense.

--
This older question explains penalties:

QUESTION:I would like to put some money away for retirement. I'm aU.S. citizen living in Canada for the near future, but I knowI'll be living in the U.S. again before I retire. Should I put my money in an RRSP or an IRA?

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david ingram replies:

Treat a T3 or a T5 as a 1099-Div or 1099. convert the figures to USdollars if in Canadian and put in the proper place on Schedules B and D.

Calculate the tax you paid to Canada and claim it as a foreign taxcredit on form 1116

There is no reason to fill out a form 8621 or QEF (Qualified ElectingFund) because the Canadian taxes will just about always wipe out anyUS tax by filing form 1116.

You can see Form 8621 here - http://www.irs.gov/pub/irs-pdf/f8621.pdf

Assuming all of your accounts total more than $10,000 US, you will thenfill out forms TDF 90-22.1 for every financial account including RRSP,RRIF and RESP accounts, AND any mother or father or sister or brother'sor company accounts yo may have signing authority over. See Question7 at bottom of Schedule B.

Form TDF 90-22.1 - http://www.irs.gov/pub/irs-pdf/f90221.pdf-

For your RRSP, RRIF and RESP accounts you should file form 3520. Thegood news is that for the RRIF and RRSP accounts you can substitute themuch easier form 8891.

Form 8891 - http://www.irs.gov/pub/irs-pdf/f8891.pdf

The penalties for failure to file these forms are immense.

--
This older question explains penalties:

QUESTION:I would like to put some money away for retirement. I'm aU.S. citizen living in Canada for the near future, but I knowI'll be living in the U.S. again before I retire. Should I put my money in an RRSP or an IRA?
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david ingram replies;

This would be a great question for the Sunday morning radio program onCKBD 600AM from 9:00 AM to 10:30 AM.

The answer,though, is that you would likely be better putting after taxdollars down on your mortgagfe if you have one. Other than that, youcan only buy an RRSP for a tax deduction. Of course, you then have tomake sure that you fill in forms TDF 90-22.1 and 8891 as follows:

The followimng question deals with a US resident but you have to fillin the same forms living in Canada - failure to file them can mean bigbig big penalties.

TDF 90 rules here


I am a Canadian citizen and legal US resident. I've lived inFlorida for 25 years and now, at 65, I'm considering takingdistributions from a spousal RRSP with Royal Bank.
Unfortunately, income tax information I've received fromdifferent sources is terribly conflicting and, at worst, indicates thatmy nest egg will be gobbled up by governments. Is this something youcan steer me straight on?


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david ingram replies:

If you roll the RRSP into an RRIF (Registered retirement investmentFund), The payer will have to deduct 15% non resident withholding taxunder the terms of Article XVIII of the US . Canada Income TaxConvention (Treaty).

You will then report it again on form 8891 of your 1040 and there mayor may not be US tax to pay. If your income is high enough that youarein a federal 28% tax rate, there 'will' be tax to pay on the RRIF.


You will claim the 15% tax paid to Canada on US form 1116.
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Now, you have been supposed to report the existence of that account tothe Department of the Treasury in Detroit on form TDF 90-22.1since 1989 when that law was passed and shown in bulletin 89-45. Failure to report can be a penalty of a minimum of $10,000 to a maximumof $500,000 PLUS up to 5 years in jail for each year you did not reportit. See the bottom question on schedule B of your 1040 where yourforeign trust requires the preparing and filing of a 3520.

Thankfully, you do NOT have to do a 3520. the 8891 takes it place andis much easier.

The penalty for not also reporting the RRSP and its internal earningsto the IRS (it was the Dept of Treasury above) is 35% of theprincipal plus 5% for each year it was not reported since 1989 when thereporting rules started. The form 8891 is an exemption for paying thetax on those internal earnings.

See form 8891 at: http://www.irs.gov/pub/irs-pdf/f8891.pdf

RELIEF

Although I know of over 1,000 people who have paid $10,000 fines fornot filing form TDF 90-22.1, I (at this time) do not know personally ofa single individual who has been fined under the 8891 / 3520 rules. Ialso have NEVER seen a person fined for filing the TDF 90-22.1 formslate and voluntarily.

In my opinion, you should file the TDF 90-22.1 forms retroactively forsix years.to the Department of the Treasury.

See Form TDF 90-22.1 at http://www.irs.gov/pub/irs-pdf/f90221.pdfNote the penalty of up to $500,000 plus five years injail for failure to file. The minimum fine is now $10,000.

You should file retroactive 8891 forms with a 1040X to the IRS for thesame years. Note that you are the BENEFICIARY so follow theBeneficiary rules. The 8891 form is actually only 3 years old. Beforethat, you just wrote out the information on a free form page but it isa convenient form to use retroactively.

Hope this helps and we would be glad to assist if needed.



If you are in the lower mainland,this will be of interest

Every Thursday at 12 noon and 7 PM, FredSnyder of Dundeee Wealth Management
presents free Financial Seminars for his clients, potential clients andanyone who phones and asks to attend.


THERE is NO CHARGE! (I used to charge up tp $999.00 foressentially the same thing)
AND - NO ONE'S ARM IS TWISTED TO BUY SOMETHING.

They are presented at the Dundee Boardroom (holds about 30 people max)

1764 West 7th
Vancouver, BC

phone (604) 731-8900 - ask for Freda to register for free.

These are genuine educational seminars dealing with everything from howto buy a house to making your mortgage tax deductible to buying an RRSPto alternatives to RRSP accounts to estate planning. SWhat started as13 separate seminars has now evolved into 23 separate topics.

IT IS NOT UNUSUAL FOR PEOPLE TO COME TO ALL OF THEM.
ONE LADY CAME TO 53 separate seminars and her husband came to about 20with her.

If you have a fiancial consultant, bring them. People have broughttheir bankers and life insurance agents with them.

Take your spouse, your best friend, your son, your daughter, yourmother or your worst enemy But do phone 604-731-8900

Fred Snyder also is thehost of ITS YOUR MONEY every Sunday morning on CKBD 600AM (600on AMdial) from 9:00 to 10:30. This is a phone in financial show which Iappear as a guest on most Sundays (when I get up). (Origianlly Iwas the co-host but the program is really devoted to BC financesbecause of BC Securities Legislation and my practice is world wide.) You can listen to 4 weeks back at www.600am.com and listen to theprogram live around the world every Sunday morning at the same spot. We have taken calls from around the world. In one case, a lady phoned=66rom Florida, got her answer and then asked if I was the David ingramshe knew in Regina back in 1959. Small world as they say.

Call (604) 280-0600 with yourquestion on Sunday Morning.

On February 11, 2008, DavidIngram wrote:

It is very unlikely that blind or unexpected email to me will beanswered. I receive anywhere from 100 to 700 unsolicited emails a dayand usually answer anywhere from 2 to 20 if they are not from existingclients. Existing clients are advised to put their 'name and PAYING CUSTOMER' in the subject lineand get answered first. I also refuse to be a slave to email and donot look at it every day and have never ever looked at it when I am outof town.
e bankruptcy expert US Canada Canadian American Mexican Income Tax service and help
However, I regularly search for the words"PAYINGCUSTOMER" and always answer them first if they did not get spammed out.For the last two weeks, I have just found out that my own email notesto myself have been spammed out and as an example, as I wrote this onDec 25, 2007 since June 16th, my 'spammed out' box has47,941 unread messages, my deleted box has 16645 I have actually lookedat and deleted and I have actually answered 1234 email questions forclients and strangers without sending a bill. I have also put aside847 messages that I am maybe going to try and answer because they lookinteresting. -e bankruptcy expert US Canada Canadian American Mexican Income Tax service and help
Therefore, if an email is not answered in 24 to48 hours, it is likely lost in space. You can try and resend it but if important AND YOU TRULY WANT OR NEEDAN ANSWER from 'me', you will have to phone to make an appointment. Gillian Bryan generally accepts appointment requests for me between10:30 AM and 4:00 PM Monday to Friday VANCOUVER (Seattle, Portland, LosAngeles) time at (604) 980-0321. david ingram expert US Canada Canadian American Mexican Income Tax service and help.
david ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
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My Home office is at:
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Cell (604) 657-8451 -
(604) 980-0321 Fax (604)980-0325

Calls welcomed from 10 AM to 9 PM 7 days a week Vancouver (LA) time - (please do not fax orphone outside of those hours as this is a home office) expert US Canada Canadian American Mexican Income Tax service help.
Disclaimer: This question has been answered without detailed information orconsultation and is to be regarded only as general comment. Nothingin this message is or should be construed as advice in any particularcircumstances. No contract exists between the reader and the author andany and all non-contractual duties are expressly denied. All readersshould obtain formal advice from a competent andappropriately qualified legal practitioner or tax specialist for experthelp, assistance, preparation, or consultation in connection withpersonal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must beincluded." e bankruptcy expert US Canada Canadian American Mexican Income Tax service and help.
David Ingramgives expert income tax service & immigration help to non-residentAmericans & Canadians from New York to California to Mexico family, estate, income trust trusts Cross border, dual citizen - out ofcountry investments are all handled with competence & authority.
Phone consultationsare $450 for 15 minutes to 50 minutes (professional hour). Please notethat GST is added if product remains in Canada or is to be returned toCanada or a phone consultation is in Canada. ($472.50 with GST if inCanada) expert US Canada Canadian American MexicanIncome Tax service and help.
This is not intended to be definitivebut in general I am quoting $900 to $3,000 for a dual country taxreturn.
$900 would be one T4 slip one W2 slipone or two interest slips and you lived in one country only (but werefiling both countries) - no self employment or rentals or capital gains- you did not move into or out of the country in this year.
$1,200 would be the same with onerental
$1,300 would be the same with onebusiness no rental
$1,300 would be the minimum with amove in or out of the country. These are complicated because of theback and forth foreign tax credits. - The IRS says a foreign tax credittakes 1 hour and 53 minutes.
$1,600 would be the minimum with arental or two in the country you do not live in or a rental and abusiness and foreign tax credits no move in or out

$1,700 would be for two people with income from two countries

$3,000 would be all of the above andyou 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 andno capital gains, etc. for $200.00 up.
With a Rental for $400, two or threerentals for $550 to $700 (i.e. $150 per rental) First year Rental -plus $250.
A Business for $400 - Rental andbusiness likely $550 to $700
And an American only (lives in the USwith no Canadian income or filing period) with about the same things inthe same range with a little bit more if there is a state return.
Moving in or out of the country orpart year earnings in the US will ALWAYS be $900 and up.
TDF 90-22.1 forms are $50 for thefirst 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 - (maybeamalgamate a couple)
Capital gains *sales) are likely$50.00 for the first and $20.00 each after that.

Catch - up returns for the US where we use theCanadian return as a guide for seven years at a time will be from $150to$600.00 per year depending upon numbers of bank accounts, RRSP's,existence of rental houses, self employment, etc. Note that thesereturns tend to be informational rather than taxable. In fact, ifthere are children involved, we usually get refunds of $1,000 per childper year for 3 years. We have done several catch-ups where the clienthas recieved as much as $6,000 back for an $1,800 bill and one recentlywith 6 children is resulting in over $12,000 refund.

This is aguideline not etched in stone. If you doyour own TDF-90 forms, it is to your advantage. However, if we put themin the first year, the computer carries them forward beautifully.
This from "ask an income trusts tax service andimmigration expert" from www.centa.com or www.jurock.com or www.featureweb.com. David Ingram deals on a daily basis with expatriate taxreturns with multi jurisdictional cross and trans border expatriateproblems for the United States, Canada, Mexico, Great Britain, UnitedKingdom, Kuwait, Dubai, Saudi Arabia, Thailand, Indonesia, Japan,China, New Zealand, France, Germany, Spain, Italy, Russia, Georgia,Brazil, Peru, Ecuador, Bolivia, Scotland, Ireland, Hawaii, Florida,Montana, Morocco, Israel, Iraq, Iran, India, Pakistan, Afghanistan,Mali, Bangkok, Greenland, Iceland, Cuba, Bahamas, Bermuda, Barbados, StVincent, Grenada,, Virgin Islands, US, UK, GB, and any of the 43 stateswith state tax returns, etc. Rockwall, Dallas, San Antonio Houston,Denmark, Finland, Sweden Norway Bulgaria Croatia Income Tax andImmigration Tips, Income Tax Immigration Wizard AntarcticaRwanda Guru Consultant Specialist Section 216(4) 216(1) NR6 NR-6 NR 6Non-Resident Real Estate tax specialist expert preparer expatriate antimoney laundering money seasoning FINTRAC E677 E667 105 106TDF-90 Reporting $10,000 cross border transactions Grand Cayman ArubaZimbabwe South Africa Namibia help USA US Income Tax Convention. Adviceon bankruptcy e bankruptcy expert US Canada Canadian American Mexican Income Tax service and help .

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