I saw your car the other day
and thought you might be the person to talk to.
I am a Canadian living here
in West Vancouver. My wife is a US citizen. We have recently bought a house in
the US Virgin Islands (US territory) and are thinking of purchasing a home on
the US mainland. We have put our house up for sale here and I would like to move
from Canada. My accountant at KPMG has told me I will face significant departure
taxes if I leave Canada. I would like to minimize and or avoid paying these
taxes. Can you be of help?
I love it when someone calls from the car
advertising. When I had my office in Park Royal, no one ever seemed to
come in from the $7,500 sign out front but when I put signs on my beat up $3,000
Jeep Grand Wagoneer, someone would come in almost every day from the car. Now I
have 5 Jeep Grand Wagoneers and 8 old Cadillacs with signs. Will have 9
Cadillacs with signs next week because I just brought an 87 Cadillac Hearse in
from the US, It is down at BROCO for a new windshield and is then going to
have a sign saying - "DON'T LET TAXES BE THE DEATH OF YOU" on it.
to your leaving the country question. That is what I do. My
associates and I specialize on Canadians in the US and Americans in
Canada. Because Americans in Canada (like your wife) have to file US
returns every year no matter where their money comes from, we have many more
Americans than Canadians as clients for this purpose. At any one time, we
will have clients in 60 to 80 countries and 49 states. For instance, in
the next month, I am doing seminars on retiring to Mexico in Vancouver Calgary
Back to your question
I am sure that I do more of
these than anyone else in Canada but I do not know if I can help you any more
than the help you are already getting from KPMG. The Vancouver and Halifax
KPMG offices are some of the few places that I recommend for US / Canada Income
tax help as you will see at the end.
If you are leaving the country,
there may be significant departure taxes calculated on forms T1161, T1243 and
T1244. However, you are not obligated to pay those taxes if you post
security for them. The HSBC and other banks regularly provide letters of
credit to the CRA for this purpose.
This LOC allows you to defer
paying the tax to the CRA until you actually sell the article.
LOC IS REQUIRED for Real Estate, Company pension plans or RRSP
Usually, a LOC is only required if you are leaving
behind an active stock trading account.
Now the problem is that there are
very few people in Canada equipped to handle your cash stock trading account if
you are living in the United States or its territories because of US
securities Law which make it illegal for a Canadian Broker to even talk to you
on the phone about your account if you are physically in the United States
unless his Company and HE or SHE themselves have registered as well in the USA
AND the STATE you are in.
Even Fred Snyder, the man I recommend most can
only talk to those in Ontario and BC because of his licensing.
someone like yourself, I usually recommend Darryl Thompson at Blackmont
Securities in Toronto or Dan Walkow at Seabank Capital in White Rock. You are
here so you should call Dan. If you go to www.Seabankcapital.com you will see
what I mean because it starts off with a US / Canadian flag.
regular lectures in LA, San Diego, Palm Springs and Phoenix for the different
Canadian Clubs there.
You can get hold of him at
Telephone: 604-541-9952 | Toll Free:
1-866-541-9952 | Fax:
(Dan) Walkow, CFA, CMT, Managing Director & Portfolio Manager:
Ajbinder (AJ) Sull, BBA,
MBA, CFA, Portfolio Manager: firstname.lastname@example.org
Paul Bains, BBA, MBA,
CFP, Associate Portfolio Manager: email@example.com
Seabank Capital Management
Suite 301, 1959-152nd Street
White Rock, British
Columbia, Canada V4A 9E3
With regard to who to deal with, the people I recommend
for this kind of information (other than myself of course)
Gary Gauvin is absolutely
qualified to deal with you. He is an old business partner of mine from
Ottawa. He now practices outside of Dallas Texas as a one or 1 1/2 person
office. If you deal with Gary, you will deal with Gary. He is a US
enrolled agent. You can find his website easily. Type - income Tax
Expert - into google. Gary will come up as number one or two.
Why, because he is. If I am looking for a first or second opinion, I call
Gary. Disadvantage - Gary is a one and a half person office.
Advantage - You will always get to talk to Gary.
corporations. I and my four associates do not like them. I like
dealing with individuals who deal cross-border withOUT
OR KPMG in Vancouver. The last
time I checked they had 22 people in their US/Canada department.
call (604) 691-3025. Advantage - Lots of Backup. Disadvantage - It
will be hard to get the same person to deal with you three times in a
OR Steve Peters with KPMG in Halifax (902)
OR Kevin Nightingale in Toronto (416)
Serbinski in Toronto
Vandenberg with BDO Dunwoody in Kelowna, BC. (250)
OR Steve Katz in Vancouver
at (604) 732-1515
OR Brad Howland in
Victoria at (250) 598-6258
Whoever you choose, you would likely do well
to consult with me for one or two hours a year. If I have a suggestion, it
will be worth it. If I can't come up with anything, you will know that
what you are doing is likely the best track. I will compare it to my
dentist, Ed Clarke. When I went in the fall of 2005, I ended up with
$16,000 to $18,000 of dental bills, a root canal, a bunch of pain, and a lot of
nice new caps, etc.
When I went for an inspection on Jan 29, 2008,
he could not find anything wrong except that I was not flossing.
Which one did i appreciate more?
Well both - the first time was expensive
but dealt with years of neglect. The second said I am on the right
Looking at the California Non-resident
Adjustment Form CA(NR) will give you another idea of how this leaving the
country stuff works for taxation after you have left and still have assets back
One other thing. Your wife will
have to sponsor you for a green card for you to go and live with her in the US
and that means doing the paperwork through Montreal. If you kept the house
in Canada, you could visit her in the US for up to six months at a time.
However, without a full blown home in Canada (or Italy, or Australia, or even
the British Virgin Islands, you can not be a visitor to the US. AND!!!
Under the circumstances you have described, your BC medical will also be
canceled or ineffective 90 days after you leave. Make sure you have
arranged for Medical BEFORE you go.
I do not know whether you saw the
CNN medical insurance special last night SAT SEPT 20, 2008 - i
watched it twice.
They had a significant number of
people (including the host) who had gone bankrupt in the states in the last few
years because of medical WITH medical insurance which had run out or did not
cover a pre existing condition. It is fairly well know that 75% of US
Bankruptcies take place because of medical bills. What is not known is
that 75% of the those HAD MEDICAL INSURANCE which ran out or was capped or had a
When was the last time you heard
of a Canadian going broke because of medical
Making sure you have a good medical plan is
more important than ANYTHING else you do BEFORE you move to the
What Do I/WE
SUGGESTED PRICE GUIDELINES - Aug 5,
david ingram's US / Canada
US / Canada / Mexico tax, Immigration and working Visa
US / Canada Real Estate Specialists
My Home office is
4466 Prospect Road
North Vancouver, BC, CANADA,
Cell (604) 657-8451 -
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 or phone
outside of those hours as this is a home office) expert US Canada Canadian American Mexican
Income Tax service
pert US Canada Canadian American
Mexican Income Tax service and
David Ingram gives expert
income tax service & immigration help to non-resident Americans &
Canadians from New York to California to Mexico family,
estate, income trust trusts Cross border, dual citizen - out of
country investments are all handled with competence &
consultations are $450 for 15 minutes to 50 minutes (professional hour). Please
note that GST is added if product remains in Canada or is to be returned to
Canada or a phone consultation is in Canada. ($472.50 with GST for in person or
if you are on the telephone in Canada) expert US Canada Canadian American Mexican
Income Tax service and
This is not intended to be definitive but in
general I am quoting $900 to $3,000 for a dual country tax
$900 would be one T4 slip one W2 slip one or
two interest slips and you lived in one country only (but were filing 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 one rental
$1,300 would be the same with one business no
$1,300 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
$1,600 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
$1,700 would be for two people with income from two
$3,000 would be all of the above and you moved
in and out of the country.
This is just a guideline for US / Canadian
We will still prepare
Canadian only (lives in Canada, no US connection period) with two or
three slips and no capital gains, etc. for $200.00 up.
However, if you have a stack of 1099, or T3 or T4A or T5 or K1 reporting forms,
expect to pay an average of $10.00 each with up to $50.00 for a K1 or T5013 or
T5008 or T101 --- Income trusts with amounts in box 42 are an even larger
problem and will be more expensive. - i.e. 20
information slips will be at least $350.00
With a Rental for $400, two or three rentals
for $550 to $700 (i.e. $150 per rental) First year Rental - plus
A Business for $400 - Rental and business
likely $550 to $700
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 $900 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
18 RRSPs would be $900.00 - (maybe amalgamate
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 the
Canadian return as a guide for seven years at a time will be from $150 to
$600.00 per year depending upon numbers of bank accounts, RRSP's, existence of
rental houses, self employment, etc. Note that these returns tend to be
informational rather than taxable. In fact, if there are children
involved, we usually get refunds of $1,000 per child per year for 3 years.
We have done several catch-ups where the client has received as much as $6,000
back for an $1,800 bill and one recently with 6 children is resulting in over
Email and Faxed information is convenient for the
sender but very time consuming and hard to keep track of when they come in
multiple files. As of May 1, 2008, we will charge or be charging a
surcharge for information that comes in more than two files. It can take
us a valuable hour or more to try and put together the file when someone
sends 10 emails or 15 attachments, etc. We had one return with over 50 faxes and
emails for instance.
This is a guideline not
etched in stone. If you do your own TDF-90
forms, it is to your advantage. However, if we put them in the first year, the
computer carries them forward beautifully.
--IRS Circular 230
Disclosure: To ensure
compliance with requirements imposed by the IRS, please be advised that any U.S.
tax advice contained in this communication (including any attachments) is not
intended or written to be used or relied upon, and cannot be used or relied
upon, for the purpose of (i) avoiding penalties under the Internal Revenue Code,
or (ii) promoting, marketing or recommending to another party any transaction or
matter addressed herein.--
-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
for expert help, assistance, preparation,
or consultation in connection with personal or
business affairs such as at www.centa.com or www.garygauvin.com. If you forward this
message, this disclaimer must be included." -