I have been reading your posts for over a year now and find them very
helpful.  In reading this one, you are saying that a foreign pension in
Canada is only taxed at 15%, is this correct?  My husband is a US citizen,
with permanent resident status in Canada.  His income from his US pension,
gets converted to Canadian dollars and added to his Canadian income. So
depending on his Canadian earnings, that is the deciding factor in which tax
bracket he is in. If he only earns $25,000 in Canada, he is taxed much less
on his US pension than if he earns $50,000 in Canada.   I do not think that
his Canadian earning should have any bearing on the amount of tax he is
paying on his US pension.  Please advise how we should be claiming his US
pension, as I feel we are being over taxed.
david ingram replies:
The US pension should be taxed at 15% in the USA as a withholding tax and
then the gross added to his Canadian Income AND TAXED AT WHATEVER HIS TAX
Then, the tax paid to the US is put on line 431 of the Canadian return and
the gross pension is put on line 433 to claim the foreign tax credit. The
gross pension (converted to Canadian dollars) also goes on line 115.
If he is receiving US Social Security, the situation is a little different.
The gross US social security is reported on line 115 and 15% is deducted on
line 256.
----- Original Message -----
From: <centapede at lists.centa.com>
To: "CENTAPEDE" <centapede at lists.centa.com>
Cc: "Webmaster at Jurock. Com" <webmaster at jurock.com>
Sent: Thursday, March 10, 2005 3:47 PM
Subject:  Foreign Tax Credit Canada for US taxes - income
tax,real estate RRSP IRA RESP 401K & immigration expertsdavid ingram &
mutual funds expert Fred Snyder on CKBD 600AMSundays at 9:00 AM
www.600am.com international preparersconsultants preparer con
> I am a recent immigrant to Canada--a US Citizen who is now also a Canadian
> Permanent Resident.  I am trying to develop a personal financial strategy,
> and have one specific question at this point.  I have a large investment
> account in the US with Merrill Lynch, consisting almost exclusively of US
> stocks, bonds, mutual funds, etc.  My understanding is that I will be
> by the US on the proceeds (dividends, interest, etc.) from that account,
> the foreign tax credit that Canada will give me for those taxes I pay to
> US will be very limited.  What do I need to do to avoid that almost-double
> taxation (other than renounce my US citizenship)?  Is the issue that the
> investments themselves are US investments, or that the Merrill Lynch
> is in the U.S?  In other words, if I were to transfer those same
> to be managed by a Canadian investment company, could I avoid that double
> taxation?
> Thanks in advance.
> --------------------
> david ingram replies:
> As a US citizen living in Canada, the maximum tax you will pay to the US
> interest is 10% and on dividends or pensions or royalties is 15%.
> Because you are a US citizen however, M-L will not withhold at the 15% or
> 10% level.  When you calculate your US tax you limit the interest to 10%
> the dividends to 15% by filing Form 1116 and recharacterizing the income.
> Canada will only allow the credit for the 10% or 15%.  This is a common
> problem and you can refile back three years and of course I would be glad
> look after it.
> In one case, we got over $45,000 back and $10,000 or $15,000 for
> accounts is not unusual.
> ====================
> Answers to this and other similar  questions can be obtained free on Air
> every Sunday morning.
> Every Sunday at 9:00 AM on 600AM in Vancouver, Fred Snyder of Dundee
> Management and I, David Ingram  host a LIVE talk show called "ITS YOUR
> Those outside of the Lower Mainland will be able to listen on the internet
> at
> www.600AM.com <http://www.600am.com/>
> Local calls are taken at (604) 280-0600 and Long Distance calls (BC only)
> are taken at 1( 866) 778-0600
> Callers to the show are invited to attend free seminars on financial
> planning with such specialities as deductible mortgage interest. They are
> held at Fred Snyder's Office at 1764 West 7th in Vancouver - (604)
> for more information.
> =========================================
> This from "ask an income tax and immigration expert" from www.centa.com
> <http://www.centa.com/>  or www.jurock.com <http://www.jurock.com/>  or
> www.featureweb.com <http://www.featureweb.com/> . David Ingram deals on a
> daily basis with expatriate tax returns with:
> multi jurisdictional cross and trans border expatriate problems  for the
> United States, Canada, Mexico, Great Britain, the United Kingdom, Kuwait,
> Dubai, Saudi Arabia, Thailand, Indonesia, Japan, China, New Zealand,
> 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, and any of the 43 states with state tax returns, etc. Rockwall,
> San Antonio and Houston Texas
> Denmark, Finland, Sweden Norway Bulgaria Croatia Income Tax and
> Tips, Income Tax and ImmigrationWizard Income Tax and Immigration Guru
> Income Tax and Immigration Consultant Income Tax  and Immigration
> Section 216(4) 216(1) NR6 NR-6 NR 6 Non-Resident Real Estate tax
> expert preparer consultant expatriate anti money laundering money
> FINTRAC E677 E667 4789 4790 TDF-90 Reporting $10,000 cross border
> transactions
> =========================
> David Ingram's US/Canada Services
> US / Canada / Mexico tax, Immigration and working Visa Specialists
> US / Canada Real Estate Specialists
> 4466 Prospect Road
> North Vancouver,  BC, CANADA, V7N 3L7
> Res (604) 980-3578 Cell (604) 657-8451
> (604) 980-0321 Fax (604) 980-0325
> Email to taxman at centa.com <mailto:taxman at centa.com>
> www.centa.com <http://www.centa.com>  www.david-ingram.com
> <http://www.david-ingram.com/>
> Disclaimer:  This question has been answered without detailed information
> 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
> 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 <http://www.centa.com> . If you forward
> this message, this disclaimer must be included."
> Be ALERT,  the world needs more "lerts"
> ==============================
> Alaska,  Alabama,  Arkansas,  Arizona,
> California,  Colorado, Connecticut,
> Delaware, District of Columbia,  Florida,
> Garland, 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,  Rockwall,
> 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 Nunavut Territories,
> Mount Vernon, Eumenclaw, Coos Bay
> and Dallas Houston Rockwall Garland
> Texas  Taxman and Tax Guru  and wizzard
> wizard - consultant - expert - advisor -advisors consultants - gurus -
> Prague Moscow Berlin
> Lima Rio de Janeiro, Santaigo
> ============================
> New York, Boston, Sacramento, Minneapolis, Salem, Wheeling, Philadelphia,
> Pittsburgh, Atlanta, Pensacola, Miami, St Petersburg, Naples, Fort Myers,
> Cape Coral, Orlando, Atlanta, Arlington, Washington, Hudson, Green Bay,
> Minot, Portland, Seattle, St John, St John's, Fredericton, Quebec,
> Truro, Atlanta, Charleston, San Francisco, Los Angeles, San Diego,
> Sacramento, Taos, Grand Canyon, Reno, Las Vegas, Phoenix, Sun City, Tulsa,
> Monteray, Carmel, Morgantown, Bemidji, Sandpointe, Pocatello, Bellingham,
> Custer, Grand Forks, Lead, Rapid City, Mitchell, Kansas City, Lawrence,
> Houston, Albany, Framingham, Cambridge, London, Paris, Prince George,
> Rupert, Whitehorse, Anchorage, Fairbanks, Frankfurt, The Hague, Lisbon,
> Madrid, Atlanta, Myrtle Beach, Key West, Cape Coral, Fort Meyers,
> Warsaw, Auckland, Wellington, Honolulu, Maui, Kuwait, Molokai, Beijing,
> Shanghai, Tokyo, Manilla, Kent, Winnipeg, Saskatoon, Regina, Red Deer,
> Medicine Hat, Lethbridge, Moose Jaw, Brandon, Portage La Prairie,
> Craik, Edmonton, Calgary, Victoria, Vancouver, Burnaby, Surrey, Edinburgh,
> Dublin, Belfast, Glasgow, Copenhagen, Oslo, Munich, Sydney, Nanaimo,
> Brisbane, Melbourne, Darwin, Perth, Athens, Rome, Berne, Zurich, Kyoto,
> Nanking, Rio De Janeiro, Brasilia, Colombo, Buenos Aries, Squamish,
> Churchill, Lima, Santiago, Abbotsford, Cologne, Yorkshire, Hope,
> Kelowna, Vernon, Fort MacLeod, Deer Lodge, Springfield, St Louis,
> Bradford, Stratford on Avon, Niagara Falls, Atlin, Fort Nelson, Fort St
> James, Red Deer, Drumheller, Fortune, Red Bank, Marystown, Cape Spears,
> Truro, Charlottetown, Summerside, Niagara Falls, Albany
> --
> No virus found in this outgoing message.
> Checked by AVG Anti-Virus.
> Version: 7.0.308 / Virus Database: 266.7.1 - Release Date: 3/9/05
> --
> No virus found in this outgoing message.
> Checked by AVG Anti-Virus.
> Version: 7.0.308 / Virus Database: 266.7.1 - Release Date: 3/9/05
> -----------------------------------------------------------------
> List-Unsubscribe: http://lists.centa.com/mailman/listinfo/centapede
mailto:centapede-request at lists.centa.com?subject=unsubscribe

No virus found in this incoming message.
Checked by AVG Anti-Virus.
Version: 7.0.308 / Virus Database: 266.7.1 - Release Date: 3/9/05
No virus found in this outgoing message.
Checked by AVG Anti-Virus.
Version: 7.0.308 / Virus Database: 266.8.0 - Release Date: 3/21/05
No virus found in this outgoing message.
Checked by AVG Anti-Virus.
Version: 7.0.308 / Virus Database: 266.8.0 - Release Date: 3/21/05


Trackback URL for this entry: http://www.centa.com/trackback.php/UsCaWeekofMon20050321001722.html

No trackback comments for this entry.