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QUESTION:
I am a US citizen, Canadian resident, landed immigrant since 1970. My
mother passed away in January 2003 leaving me the proceeds of an IRA of
$37,000. US.
My question is what taxes will be due on this, where would I pay them? (US
or Canada or both), and how do I file?
I have no other US income but I do have a small amount of Canadian
investment income (less than $10,000 cdn). Any advice you can provide will
be much appreciated.
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david Ingram replies
As a US citizen living in Canada, you are supposed to be filling out a US return each year you are in Canada. Also as a Permanent Resident of Canada, you need a PR card to get back into the country by commercial carrier as of Jan 1, 2004.
This will be the item which allows the US IRS to catch up to your non-filing status if you have not been filing your US returns.
So catch up the last six years before they catch up to you. If you do it voluntarily, it is unusual to owe tax and there are no any penalties as a rule. If they catch you, there can be large penalties.
At any rate, you will prepare a US 1040 for 2003 and calculate the tax on the IRA. Then the same money will be reported on line 115 of your Canadian return and we will claim a foreign tax credit for the tax paid to the US.
You may exempt up tto $80,000 US of Canadian earnings on your US return.
You should get your Canadian Citizenship. There are NO disadvantages and too many advantages to list in the long run.
Go to www.centa.com and read the October 1993 newsletter for more information on Dual Citizenship.
Our office would be glad to help you with your catch up returns by mail, email, fax, courier or a personal visit.
David Ingram's US/Canada Services
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
108-100 Park Royal South
West Vancouver, BC, CANADA, V7T 1A2
Calls accepted from 10 AM to 10 PM 7 days a week
Res (604) 980-3578 Cell (604) 657-8451
Bus (604) 980-0321
[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 & the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent financial, or real estate planner or advisor & appropriately qualified legal practitioner, tax or immigration specialist in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included."
This from "ask an income tax and immigration and bankruptcy expert" from www.centa.com or www.jurock.com or www.featureweb.com. Canadian David Ingram deals daily with tax returns dealing with expatriate:
multi jurisdictional cross and trans border expatriate problems for the United States, Canada, Mexico, Great Britain, the United Kingdom, Kuwait, Dubai, Saudi Arabia, South Africa, Thailand, Indonesia, Egypt, Antarctica, 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, St Vincent, Grenada,, Virgin Islands, US, UK, GB, American and Canadian and Mexican and any of the 43 states with state tax returns, etc.
Alaska, Alabama, Arkansas, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico,New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon. Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, West Virginia, Wisconsin, Wyoming, British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec City, New Brunswick, Prince Edward Island, Nova Scotia, Newfoundland, Yukon and Northwest and Nunavit Territories, Mount Vernon, Eumenclaw, Coos Bay and Dallas Taxman and Tax Guru Your name has been added to our email list because of an enquiry we have received, we may not answer your question but
another similar question will be as we lump them.
You may find more answers at www.centa.com
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) 980-0321 - Fax 913-9123 [email protected]
www.centa.com www.david-ingram.com
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