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Dear Taxman,
I am a dual (US-CDN) living in Canada.
I have a rollover IRA and a Keough still in the US as well as Canadian RRSP's.
Can I keep the US retirement investments indefinitely?
Can both grow tax deferred?
And at retirement, what will happen if I retire in Canada?
JXXXXXXX
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david ingram replies:
You can keep your IRA and Keough plans until retirement.
If you retire to canada, at that time you will pay 15% US tax on them and then report them again on line 115 of your Canadian return and pay Canadian Tax.
You will claim a foreign tax credit in Canada for the 15% tax paid to the US.
If the US tax is more than 15%, you have to ask for the refund from the US as Canada will only allow you credit for the 15%.
If the reverse happejns and you retire to the US, you will pay Canada 15% on your withdrawals from your RRIF account or pension and claim a foreign tax credit in the US.
Your real danger at the moment is that you need to address your RRSP problem with the US government. You have until Aug 15, or October 15 (depending upon extensions filed) to file your internal CANADIAN RRSP earnings with the IRS. You should also be filing your TDF 90 forms to report your Canadian accounts to the US Department of the Treasury.
Failure to file these forms can result in US fines of up to 135% of the amounts in your RRSP and fines of up to $500,000 PLUS 5 years in jail for failure to file the TDF-90 forms.
goto www.centa.com, click on newsletters, click on 2003 and click on August for more information on these matters.
We, of course, can look after these for you.
David Ingram of the CEN-TA REALTY Group
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
108-100 Park Royal South
West Vancouver, BC, CANADA, V7T 1A2
(604) 913-9133 - Fax 913-9123 [email protected]
www.centa.com www.david-ingram.com
Disclaimer: This question has been answered without detailed information or consultation and is to be regarded only as general comment. Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader and the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent and appropriately qualified legal practitioner or tax specialist in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included."
Be ALERT, the world needs more "lerts"
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