CEN-TA Cross Border Services - Tax, Visa

Need to file form 8891 if you don't have RRSP income? History of 8891 form - Expert Income Tax help on cross Border tax

Taxman — Thu, 26 Aug 2010 09:21:01 -0700

My_question_is: Both

question: Hi David,

I have been trying to find this information but no-one gives me a definitive answer. Hopefully you could bring some light. Do Canadians ALWAYS have to file form 8891 if they have an RRSP, or is it only when there is a reportable income from the RRSP (over $10)? So for instance, if RRSP interest earnings are less than $1 (and that's all the "income") do I also have to file form 8891?

Thank you!

-----------------------------------

david ingram replies:

If you have an RRSP, you have to file form 8891 whether there is a profit or a loss or it stays even.

Failure to file the 8891 (or the 3520 referred to in question 8 on Schedule B) can result in a penalty of 35% of the amount in the RRSP.

If the total of your RRSP accounts and any other bank accounts or other financial accounts you have signing authority over is over $10,000, you also have to fill in form TDF 90-22.1 as asked for in question 7 Schedule B.

Note that it does not have to be 'your' account. If you have signing authority over a parent's account of a company account, they must be reported as well with a minimum penalty of $10,000 if they decide to enforce it.

Since I have has 30 year old, 50 year old 60 year old and 1 105 year old penalized $10,000 to $100,000 PLUS 6 months in jail under this legislation, I tell you to report the accounts.

--- History of the 8891 form

This might be important to someone. still it is the only question I have answered on the international list for a few days so I send it along 'just in case' someone does want to visit the reasons behind the 8891 form

ingram

On 26/07/2010 9:34 AM, xxxxx xxxxxxxxx wrote:

Question: The older regulation under Canada - US tax treaty was Rev: 89-45 in United States for RRSPs.. What is the name of the current regulation for RRSPs in US?

xxxxx xxxxxxxxx
--------------------------------------------------------
david ingram replies:

I had ALL of this in one file but it seems to have disappeared. The following is a quick pull of some of the articles at www.centa.com.

There is not enough interest that I can see to spend more time dealing with it.

All the regs are virtually ignored now if you file form 8891 each year for each RRSP (also TDF 90-22.1) and answer YES to question 8 on Schedule B of you 1040.

The following are what was sent out during the transition.

I  will be speaking about this on Fred Snyder's Show on CFUN
Radio in Vancouver at 2 PM April 19, 2003.  call 604 280-CFUN
with your questions.

On April 15th, I read Jonathon Chevreau's column and thought that
it "had to be wrong".  I phoned him and told him so after about
three hours of research and ONLY after talking to THREE different
people -(the first one passed the buck - and the second one
answered and then had a more senior buck call me back) - at the
US office of Voluntary Compliance in Philadelphia.   I was
reassured.  Not only did they not know anything about it but they
could not find the NOTICE 2003-25 quoted in the article. In fact,
they were extremely annoyed with my taking up their time on April
15th and were only slightly mollified when I sent them a copy of
the Article.

I started thinking that the American Chamber of Commerce and
Jonathon Chevreau had been caught in an April FOOLS joke
However, your scribe continued and can now tell you that it was
"NOT" an April fool's joke and that every US resident or US
Citizen with a Canadian RRSP has a whole new set of rules to deal
with.
Here is the article which I have copied from:
http://www.Canada.com/search/story.aspx?id=36dff6b8-b741-470a-88a
a-f6085b536727
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      Jonathan Chevreau
      Financial Post
Tuesday, April 15, 2003
An estimated 100,000 Americans holding Canadian RRSPs are being
asked to submit to onerous new paperwork requirements, along with
stiff fines for those who fail to comply.
While today is the tax-filing deadline for Americans, the
deadline to comply with the new compliance regime has been
extended to Aug. 15, according to The American Chamber of
Commerce in Canada (Amcham).
Last Friday, the U.S. Internal Revenue Service (IRS) issued
Notice 2003-25, which Amcham treasurer Jim Yager describes as a
"departure" from previous procedures.
U.S.-Canadian tax experts familiar with the new forms are "quite
upset at the unbelievable paper burden and complexity," says KPMG
national tax partner Paul Hickey.
The complex six-page form 3520 has to be filled out by any U.S.
citizens receiving distributions from Canadian RRSPs, a form
which also requires additional attachments. While the form itself
may be easily obtained over the Internet, filling it out will
require the cooperation of financial institutions. Mr. Yager
isn't sure all financial institutions will be willing to
accommodate. Failure to file results in a penalty of 5% of the
assets held in the trust.
While reporting transactions on foreign trusts like RRSPs were
required in the past, "they weren't really interested in
receiving the forms," Mr. Yager said in an interview.
Instructions for the 2001 and 2002 tax years didn't require the
forms to be filed as long as an exemption was claimed under the
Canada-U.S. tax treaty.
Mr. Yager, who is also a partner with KPMG's U.S./Canada tax
practice, provides an example in a bulletin issued by Amcham. It
involves a U.S citizen who contributed $10,000 to an RRSP on Jan.
1, 2002, and who experienced no growth because of poor financial
markets.
Even so, if he withdraws the same $10,000 on Dec. 31, 2006 --
essentially a return of capital -- the taxpayer is hit with two
35% penalties for failing to file form 3520 both on the
contribution and on the "distribution" plus a 5% annual penalty
for failing to file form 3520A, plus U.S. income tax on the
distribution, plus interest charges.
The total cost of U.S. taxes and penalties on the original
$10,000 RRSP contribution hits $13,917, even though no income was
earned.
The notice indicates penalties will not be enforced for tax years
before 2002.
While Mr. Yager estimates there are also 100,000 Canadians saving
in U.S. 401K plans or IRAs, Canada tax law does not require
comparable reporting of those plans.
jchevreau@nationalpost.com
© Copyright 2003 National Post
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I tried to contact Jim Yager but his executive assistant,
Barbara Wolek was kind enough to send me what they had received.
It was dated April 11, 2003.  I have scanned the PDF file and
converted it to  Word and am putting it in here so that everyone
has an original source document.
-----------------------------------------------------------------
-----------------------------
April 11, 2003
ADVANCE COPY OF INTERNAL REVENUE BULLETIN ITEM
Attached is an advance copy of Notice 2003-25, describing
Canadian Retirement Plan Trust Report.
It will appear in Internal Revenue Bulletin 2003-18, dated May
5,2003.
You may release this notice immediately.
Communications Division
Part III - Administrative, Procedural, and Miscellaneous
Canadian Retirement Plan Trust Reporting
Notice 2003-25
Internal Revenue Code section 6048 requires information reporting
with respect to certain foreign trusts. Persons subject to these
information reporting rules must file Form 3520 (Annual Return to
Report Transactions with Foreign Trusts and Receipt of Certain
Foreign Gifts) or Form 3520-A (Annual Information Return of
Foreign Trust with a U.S. Owner), as applicable.
Form 3520 is generally filed on an annual basis on or before the
due date for the U.S. owner's or U.S. beneficiary's income tax
return. A person may obtain an extension of time to file Form
3520 by obtaining an extension of time to file the applicable
income tax return. Form 3520-A is generally due by the fifteenth
day of the third month after the end of the trust's tax year. A
person may seek an extension of time to file Form 3520-A by
filing Form 2758 (Application for Extension of time to File
Certain Excise, Income, Information, and Other Returns). Specific
penalties under Internal Revenue Code section 6677 apply if a
Form 3520 or Form 3520-A is not timely filed or if the required
information is incomplete or incorrect.
Treasury and the Internal Revenue Service have become aware that
many taxpayers with interests in Canadian registered retirement
savings plans (RRSPs), as well as the custodians of such plans,
are unfamiliar with the requirements for filing Forms 3520 and
3520-A. Under the circumstances, the IRS has determined that it
will enforce neither filing requirements, nor penalties under
section 6677, for Forms 3520 and 3520-A with respect to such
plans for tax years before 2002, and will grant additional time
to file these forms for 2002. Any person who is required to file
a 2002 Form 3520 or Form 3520-A with respect to an RRSP or other
eligible plan within the meaning of section 3 of Revenue
Procedure 2002-23,2002-1 C.B. 744, is granted an automatic
extension of time to file until August 15, 2003. If a person
obtains an extension of time to file a Form 3520 or Form 3520-A
for a date later than August 15, 2003, then such later extension
date applies- Penalties for failure to file will not apply to a
person who files by the relevant extension date.
In addition, if the beneficiary of an eligible plan has made an
election in accordance with section 4 of Rev. Proc. 2002-23 and
the beneficiary complies with the annual reporting requirements
of Rev. Proc. 2002-23, the plan is relieved of any obligation to
file Form 3520-A for any year for which such requirements are
met.
Treasury and the IRS are interested in establishing for future
taxable years a simplified reporting regime for RRSPs and persons
with interests in RRSPs. In addition to streamlining the
reporting requirements, Treasury and the IRS are considering
coordinating them with the election described in Rev. Proc.
2002-23. Treasury and the IRS also will consider whether there
are other pension plans similar to RRSPs for which similar
simplified reporting is appropriate.
The principal author of this notice is Amanda A. Ehrlich of the
Office of Associate Chief Counsel (International). For further
information regarding this notice contact Amanda A. Ehrlich or
Willard W. Yates on (202) 622-3880 (not a toll-free call).
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WHAT HAPPENED NEXT?
 I then phoned (202) 622-3880 and after talking to a couple of
people, managed to get through to Amanda Ehrlich and Willard
Yates and (with both their knowledge) talked to both of them and
some others who were unfortunate enough to have answered the
phone..
I found out two things:      
ONE:    The new rule is correct and will be enforced.
                                         
TWO:    They are still not positive exactly "WHAT" has to be done.

For instance, I was given the clear impression by one person that
the 3520 did not have to be filled in if you were just buying an
RRSP.  Another one contradicted that statement and was of the
opinion that a 3520 form "would" have to be filed if a person put
any money into an RRSP even though the actual instructions for
form 3520 would seem to exempt that transaction.
It seems to me that Notice 2003-25 was released prematurely.
Although this Advanced copy  It states that it will be included
in an Internal Revenue Bulletin 2003-18 to be released on May 5,
2003 and it might be that by that time there is more consensus
about what needs to be done.
The "instructions" for form 3520 clearly state that the form does
"NOT"  need to be filed if the transaction is a transfer to a
CANADIAN REGISTERED RETIREMENT SAVINGS PLAN.
There is also a form 3520-A which is suppose to be filed to
calculate the internal earnings of the RRSP / RRIF / RPP.  Yes,
one person I talked to was adamant that when filing the 3520, I
should write RRSP / RRIF / RPP across the top of the form.  I was
really concerned about that statement because that means   that
it would apply to a RRIF AND a Company Pension.
Neither of those were considered in Jonathon Chevreau's article.
WHAT AM I DOING AND RECOMMENDING TO OUR CLIENTS?
I am telling everyone to hold tough until May when we will get a
chance to find out just where this is going.  The Instructions
for the form state that it takes 42 hours for record keeping, 4
hours to learn about the form, 6 hours and 28 minutes to prepare
the form and just 16 minutes to mail it to the IRS.
They have clearly extended the deadline to August 15th, 2003.  We
are going to track down every US / Canadian client for the last
five years to warn them about the rules.
The we will have two or three local seminars and then we will try
and computerize to get rid of a 6 hour preparation time.
However, although one US lawyer in Canada has already volunteered
to be a guinea pig (by just putting his name on the form and the
amount of his contribution down and mail it in) I so not want to
expose average US to the punitive penalties involved.

There is more but this gives you an idea of what happened.
---------------------------------------------------------

QUESTION:
I am a dual citizen who lives and works in Canada. Can I deduct RRSP =
contributions in Canada from my income reported on the US tax returns? =
If so, how do I show that?
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
david ingram replies:
You cannot deduct a Canadian RRSP contribution on your US tax return.
Not only that, there are major reporting requirements for a US citizen =
(anywhere) or a Canadian with an RRSP living in the US.
I would be glad to look after the reporting for you if you need help.
=20
The following National Post article is of extreme importance to any US =
resident or US Citizen with a Canadian RRSP, RRIF or RPP that they have =
contributed to.
http://www.nationalpost.com/search/site/story.asp?id=3DA5F6348F-EDA6-493A=
-A822
Because some people do not like opening files, I have pasted and copied =
it at the end as well..
Jonathon Chevreau has done a yeoman's job in searching down and tracking =
a variety of opinions on the new reporting rules.
I did a quick search of our computer data base and came up with 14 =
people who had withdrawn money from an RRSP - I think but have not =
verified that 8 of them are US citizens and will require a 3520 by =
August 15th or a further extension date.
I have another 212 who have an amount on line 115 - and at least half of =
them are US citizens. My understanding is that any US citizen taking =
money out of a RRIF or a Canadian Company pension which he or she =
contributed to, must file a form 3520 as well. However, if they took =
money out of a Company pension plan that they did NOT contribute to, the =
US person does NOT need to file a 3520.
At any rate every US person conform to REV.PROC 2002-23, This means =
that (for each RRIF, RRSP, RPP) we must provide:
Section 4 Election Procedures
.01 In General
(i). A Statement that the taxpayer is claiming the benefit of Article =
XVIII(7) of the US / Canada Income Tax Convention
(ii) The name of the trustee of the plan and the account number
(iii) The balance of the plan at the beginning of the current year.
.02 Reporting
Beneficiaries shall attach a copy of the statement required in 4.01 =
until the tax year in which a final distribution is made.
.03 ROLLOVERS
If a rollover is made to a plan that does not attract Canadian Income =
Tax, and qualifies under Revenue Ruling 89-95, the previous election is =
deemed to carry over to the transferee plan.
.04 Transferee Plan Reporting
In the year of transfer, the beneficiary shall attach an additional =
statement
(i). A Statement that the taxpayer is claiming the benefit of Article =
XVIII(7) of the US / Canada Income Tax Convention
(ii) The name of the trustee of the transferee plan and the account =
number
(iii) The name of the trustee of the transferor plan and the account =
number
(iv) The total amount of income accrued in the transferer plan on =
which United States Income tax was deferred under Article XVIII(7) or =
former Article XXIX(5); and
(v) The initial balance in the transferee plan.
Beneficiaries of a transferor plan shall attach a copy of the statement =
required in paragraph 4.02 (transferor plan) and a copy of the =
statement required in this paragraph 4.04 (transferee plan) to their =
timely filed (including extensions) United States federal income tax =
return for each year subsequent to the transfer year until the tax year =
in which a final distribution is made from the transferee plan.
.05 MULTIPLE PLANS
An individual who is a beneficiary of more than one eligible plan must =
make a separate election and file a separate statement for each eligible =
plan.
.06 Extension of time for Making an Elections
An extension of time for making an election under paragraph 4.01 may be =
available under the procedures applicable under sections 301.9100-1 and =
301.9100-3 of the Procedure and Administration regulations.
.07 PROSPECTIVE CHANGE OF ELECTION
An election once made cannot be revoked except with the consent of the =
Commissioner.
SECTION 5. DISTRIBUTIONS FROM AN ELIGIBLE PLAN
Distributions received by a beneficiary from an eligible plan shall be =
included in gross income by the beneficiary in the manner provided under =
section 72 of the Internal Revenue Code, subject to any other applicable =
provision of the Convention.
(The above is excerpted from Revenue Procedure 2002-23).
To our clients - START GETTING THE INFORMATION ASKED FOR ABOVE READY. =
WE NEED TO GET IT IN BY Aug 15, 2003.
david ingram
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Jonathon Chevreau's National Post Article follows with four varying =
interpretations of what is going on.
-------------------------------------------------------------------------=
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Uncle Sam discovers RRSPs
New IRS reporting rules part of broader crackdown
=20
Jonathan Chevreau =20
Financial Post=20
Saturday, May 03, 2003
=20
=20
=20
=20
Just before the April 15 tax filing deadline for American =
citizens, the Internal Revenue Service dropped a bomb which scared or =
confused the 100,000 Americans believed to hold Canadian Registered =
Retirement Savings Plans.
These include expatriate Canadians living in the United States, =
and U.S. citizens and green-card holders living in Canada.
On April 11, when 90% of Americans would already have filed this =
year's taxes, the IRS issued Notice 2003-25, requiring U.S. citizens =
receiving withdrawals from Canadian RRSPs to fill out a complex six-page =
form called the 3520 [Annual Return to Report Transactions with Foreign =
Trusts and Receipts of Certain Foreign Gifts.]
The new rules are being applied retroactively to this year's =
returns, although the deadline was extended to August 15.
If the U.S. citizen or resident files certain simplified forms and =
elects deferral of taxation through the Canada/U.S. income tax treaty, =
they won't have to file form 3520 for contributions or form 3520-A for =
ownership of an RRSP.
Failure to file these simplified forms can result in penalties of =
35% of all contributions to RRSPs and 5% of the balance in the RRSP,
Form 3520 must also be filed for any withdrawals from RRSPs, which =
includes draw downs for Home Buyers Plans, Lifelong Learning Plans and =
rollovers to Registered Retirement Income Funds, but not rollovers =
between RRSPs.
David Ingram, a Vancouver consultant with almost 2,000 clients =
affected by the new red tape, describes the changes as "a secondary U.S. =
Treasury backlash" to Canada's lack of military support for the Iraq =
invasion. The U.S. consulate and IRS deny this interpretation.
When the Post revealed the IRS changes in mid-April, Ingram was so =
flabbergasted at the onerous requirements he thought it was an April =
Fool's joke. His subsequent investigation revealed it was no joke, =
although he found few U.S. tax officials aware of the changes.
The 1980 tax treaty and a 1996 amendment clearly exempted Canadian =
RRSPs from U.S. taxation, he says. But after 9/11, the U.S. Treasury =
started looking more seriously at money laundering, he says.
The 2001 instructions for form 3520 removed the withdrawal =
exemption for RRSPs, but left the deposit exemption in place. "With =
Canada's failure to support the U.S. in Iraq, a natural next step would =
be to remove the last exemption of deposits. The people at Treasury =
suddenly felt Canada is not trustworthy."
Until April 11, Canada was considered the friendliest nation. "If =
you were an American in Australia, France or Germany, with a foreign =
pension plan, you always had to file 3530. Now Canada has to be treated =
like the rest of the world."
Ingram found the new rules also apply to Registered Pension Plans =
and RRIFs. He says the IRS author of 2003-25 advised clients to write =
RRSP, RPP or RRIF across the top of form 3520, which is required for =
each RRSP, RPP or RRIF held, regardless of value.
The law is unclear on reporting requirements on RPPs and pension =
plans, says Jim Yager, partner with KPMG's U.S./Canada tax practice. He =
believes an exemption for these distributions may yet be granted but "if =
not, the scope for reporting will be huge since it will not be directed =
at just Canadian plan distributions."
Yager says the reporting requirements for RRSPs are part of a =
broader crackdown by the IRS against offshore tax havens. As treasurer =
of the American Chamber of Commerce in Canada, Yager says he first =
noticed a change in the IRS's position with the filing instructions for =
form 3520 in the 2001 tax year. That conflicted with the 2000 =
instructions, which exempt transfers in or out of RRSPs.
One U.S. citizen who has lived in Canada 20 years and files U.S. =
returns says he's baffled by the IRS's position, which he describes as =
"nonsensical, counter-productive, wasteful and pointless."
"The requirement is a lose-lose proposition for the U.S. =
government." IRS costs will rise but little extra revenue will be raised =
by its efforts in Canada.
"Chronic non-filers get one more reason to stay underground. U.S. =
tax filers can't use RRSPs for tax evasion because Canadian government =
strictly controls the flow of money and its reporting."
The IRS has long had a problem getting Americans resident in =
Canada and green card holders to file tax returns. "This requirement =
simply creates another disincentive."
Thanks to the foreign exemption on earned income and the foreign =
tax credit, few Americans and green card holders in Canada owe U.S. tax, =
so the exercise is a wasteful paper chase.
The previous reporting procedure at least provided the IRS and tax =
filers with a paper trail; retirees making withdrawals faced no U.S. tax =
on capital coming out since the U.S. granted no deduction for =
contributions going in.
Cross-border tax specialist David Lesperance of Burlington, =
Ont.-based Global Relocate Consultants says the new rules reflect =
renewed "IRS avarice." The American consulate has a similar view: "It's =
just the IRS trying to get every nickel and dime out of everyone."
Lesperance says large financial institutions known as "qualified =
intermediaries" play a greater role alerting the IRS to American =
citizens in Canada with U.S. tax filing obligations. "With the Patriot =
Act, qualified intermediaries and increased co-operation between the =
U.S. and Canada, it's like shooting fish in a barrel to collect in =
Canada."
One qualified intermediary who didn't want to be named says =
financial institutions are still assessing their obligations and =
potential liabilities. "It's unclear at this point what [Canadian] =
financial institutions will have to do .... [We] may have to make an =
interpretation of tax law in some way."
Kevyn Nightingale, an accountant with Toronto-based International =
Tax Services Group, says those scared by the new rules need to "calm =
down."
In an article published by CCH Reports entitled "IRS says Boo, =
Scared Yet?", Nightingale says the problems can be avoided by giving the =
IRS some basic information and a declaration the taxpayer elects to =
defer U.S. taxation on income earned inside plans but not distributed in =
the year.
Why then the panic? "The IRS determined that many people who have =
RRSPs are not reporting," says Nightingale. "For people already =
reporting, there's nothing to fear and nothing extra to do. For those =
not reporting, it's not hard to hop on board."
They have till Aug. 15 to do so.
jchevreau@nationalpost.com
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and a couple of more things you might want to look up for the historical record.

-The following explains the method of presenting a proposal for changes to IRS procedures. Perhaps we can reverse REV.PROC 2003-23's demands for forms 3520 and 3520-A to be filed for Canadian RRSP, RPP and RRIF accounts.
If you wish to add your voice to the submission I will be making, please email (and snailmail your signed original) your opinions, concerns, doubts and possible solutions to me. My mailing address is at the bottom. Please note that I need everything by May 10th or so.
Please also note that there will be another pro America Rally this next Saturday, April 24th at 11 AM at the Seaforth Park at the south end of the Burrard Street Bridge. Bring your American, Canadian, Australian, Mexican, Great Britain and other flags and any home made signs you may desire. This is NOT a pro war rally. It is a solidarity rally to get things moving again and let the US population know that Canadians are friends even if some of our federal politicians do not seem to get it. I also recommend Fazil Mihlar's column on page A6 of the April 21, 2003 Vancouver Sun. This column "Free trade is a friend of the Environment" gives some very interesting statistics.
For those who want to know more about the new reporting for Americans or American residents with Canadian RRSP, RPP or RRIF accounts, read Jonathon Chevreau's column on FP12 in the National Post on April 15th, or email for a copy of my newsletter on the subject if you killed it.

david ingram
IR-2003-52
REVISED INDUSTRY ISSUE RESOLUTION PROGRAM PROCEDURES PUBLISHED; NEXT
SELECTIONS MADE FROM REQUESTS RECEIVED BY MAY 15, 2003
WASHINGTON - The Internal Revenue Service has published revised
procedures for the Industry Issue Resolution (IIR) Program. Under the
revised procedures, business taxpayers, industry associations and other
interested parties can submit frequently disputed or burdensome business
tax issues at any time for possible resolution under the program.
In past years, issues have been submitted by industry associations and
others representing both small and large business taxpayers. These
submissions have resulted in tax guidance that has affected thousands of
taxpayers. Recent guidance issued under the IIR Program includes standard
rates for meals provided by family day care providers and an inventory
valuation method for re-buildable motor vehicle cores.
Requests received will be reviewed semi-annually, generally after
March 31 and August 31 of each year, for inclusion in the program.
However, to allow time for initial IIR submissions, the March 31 review
date has been changed to May 15, 2003, for this year. All requests
received by May 15, 2003, will be considered for IIR project selections
that are expected to be included in the 2003-2004 Treasury and IRS
Guidance Priority List.
For each issue selected for the program, IIR team consisting of IRS and
Treasury personnel will meet with taxpayers or other interested parties
affected by the issue. The goal is to recommend guidance which will
resolve the tax issue. This benefits both taxpayers and IRS by saving time
and expense that would otherwise be expended on resolving the issue
through examinations.
For information on the IIR Program and how to submit issues for
consideration, see Revenue Procedure 2003-36 at www.irs.gov.
-

If your question was not answered fully or you wish to go further, I am available for individual consultations by phone or email or in person for $450 per professional hour.

Please also note that we prepare Canadian, US, Australian, UK and New Zealand returns on a mail in, email, fax, snail mail or couriered basis. At any time, our clients are in 40 countries or more. They have every occupation from nuclear Submarine captains to FedEx pilots to Major Bank officers to Politicians, Diplomats and border patrol officers. My favourite, however, is a penguin catcher in Antarctica among others there..

If you 'really' only have a single question requiring a 'couple' of minutes, you can try phoning me for free as part of the following.

- For a quick free question

You might try calling Fred Snyder's radio program for an answer on a Sunday Morning..

Fred Snyder's "IT'S YOUR MONEY" radio show. on CISL, 650 AM on the dial in Vancouver from 9 to 11:00 AM every Sunday (604) 280-0650 or (877) 280-0650 - You can listen live from anywhere in the world at www.am650radio.com from anywhere in the world. click on the button in the top left hand corner.-
- You might try calling Fred Snyder's weekly radio programs for an answer.

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-

david ingram's US / Canada Services
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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 or phone outside of those hours as this is a home office) expert US Canada Canadian American Mexican Income Tax service help.

email to taxman@centa.com
www.centa.com www.david-ingram.com

pert US Canada Canadian American Mexican Income Tax service and help.

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 & authority.

...

Canada Home Buyers Plan & RRSP Withdrawal to IRS? - Expert Income Tax help on cross Border tax and immigration and divorce a

Taxman — Mon, 23 Aug 2010 12:35:19 -0700

This note really only applies to Vancouver Island residents.

Fred Snyder will be presenting his seminar on Retirement planning on Tuesday Night, Aug 24, 2010 from 6 PM to 9 PM at he COMFORT INN at 101 Island Highway in Victoria. Call 1-877-475-7526 to register. I believe that the Inn is at the corner of Craigflower and Admiral but do check your map. NO CHARGE - No Obligation.

My_question_is: Both

question: Dear Tax Expert

I would really appreciate your advice. I am Canadian living in the US. In 2005 I withdrew some funds tax free from my RRSP to purchase a rental home under the home buyers plan.  I moved to the US in 2009 and that same year sold the house. As a deemed non-resident in 2009, the CRA had me declare the 2005 RRSP funds as income in 2009 (had to pay all taxes on that since I left Canada). My question is:

-	Do I also have to declare the 2005 RRSP withdrawal as 2009 income to the IRS using form 8891? This doesn't make sense to me since there wasn't an actual distribution in 2009 (as per the RRSP statement) and I can't put a number in line 7a in form 8891   

Thanks a lot!!

david ingram replies

The first error was that a HBP can NOT be used to buy a rental house - It has to be used to buy a house that you lived in so properly, the RRSP withdrawal was taxable in 2005.

You do not have to report the Withdrawal on form 8891 because you made the withdrawal BEFORE moving to the US and presumably declared it on the departing Canada Tax from along with Forms T1161 and maybe 1243 and 1244..

However, if you still have any balance in an RRSP in Canada, you have to be sure to report them on form 8891 and if the total exceeds $10,000 fill in forms TDF 90-22,.1 as well

And, of course, an other Canadian or German or Australian, etc accounts must be reported as well.

Circular 230 Disclosure: Pursuant to recently-enacted US Treasury Dept. regulations, we are now required to advise you that, unless otherwise expressly indicated, any federal tax advice contained in this communication, including attachments and enclosures, is not intended or written to be used, and may not be used, for the purpose of (i) avoiding tax-related penalties under the internal revenue code or (ii) promoting, marketing, or recommending to another party any tax-related matters addressed herein.
Privileged and Confidentiality Notice: This electronic transmission (and/or the documents accompanying it) may contain confidential information belonging to the sender. The information is intended only for the use of the individual or entity to which it is addressed. If you are not the intended recipient, you are hereby notified that any disclosure, copying, distribution, electronic storing, or the taking of any action in reliance on the contents of this information is strictly prohibited. If you have received this transmission in error, please immediately notify the sender by reply e-mail and immediately delete this record from your computer system.

david ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:

4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325

email to taxman@centa.com
www.centa.com www.david-ingram.com

pert US Canada Canadian American Mexican Income Tax service and help.

...

Filing back US taxes by a US citizen in Canada - Expert Income Tax help on cross Border tax and immigration and divorce and RRSP

Taxman — Sun, 15 Aug 2010 11:44:13 -0700

Below is the result of a form post from your website.  It was submitted by
 (webmaster@AskAnExpert.ca) on Sunday, August 15, 2010 at 11:01:44
---------------------------------------------------------------------------

.intro: An askanexpert.ca visitor has a question for you. To answer, just reply to this message.

from: xxxxxxxxxxxxxx

QUESTION: Hi David, you come highly recommended by a friend, so I'm hoping you are able to help me out. 

I have canadian and american citizenship, but only received my american passport in 2002. I've never been a resident there, have always been a resident in BC.

I am planning to move to the US to work with my SSN however I have never filed taxes with the IRS and have just been informed that I will be required to pay back taxes for many years. Also I have a savings account with more than $10,000 in it and I was told I would have to pay a fine for not informing the IRS of my savings. I also have some mutual funds in a RRSP and was told that I should sell them then buy them back the next day before I move down there. Please advise on the steps I need to take to avoid paying penalties to the IRS.

Thank you very much!

david ingram replies:

When you applied for your American passport you reasserted your US citizenship and agreed to all the responsibilities of being an American citizen no matter where you live and no matter where your income comes from. US citizens are taxable on their world income no matter where they live.

There are exemptions and foreign tax credits however so up to $100,000 of earned income in another country is rarely taxable if you follow the rules.

However,the US Treasury is verrry concerned about American citizens with foreign accounts of any kind. Even an account for the Xmas party at work must be reported to the US treasury if you can sign on it. Other accounts you might not think about are

*    a boy scout account because you are the scoutmaster or a girl guide account because you are the leader

*    a joint account with your mother or father to look after their affairs if there is a problem

*    a payroll account at work.

*    Your LIF, RRSP RRIF or other retirement account.

*    your cash account at the stockbrokers

*    a mutual fund you bought from the bank or credit union

*    an account you opened for one of your children or grand children.

Unfortunately, the minimum penalty for failure to file the form (TDF 90-22.1) for theses accounts is $10,000 per year per account. The silly record in my office was a 105 year old lady back in 1995 (nothing new here). However, I also know individuals who have received $100,000 plus 6 months in jail and $60,000 fines.

You should go to www.centa.com and read the Oct 95 newsletter (nothing knew) in the top left hand corner for a list of what you should have been doing. You should also read the Oct 93 newsletter for an idea about dual citizenship.

When you received your passport, there should have been a notice in it telling you to file back six years of tax returns if you had not done so already. Unfortunately, Canadians just do not get the fact that it means they have to file US returns and ignore it because they have been filing their tax returns.

What you should do now is file back six years plus the current year which means that you should file 2003 to 2009 US returns PDQ AND more importantly get the Foreign account reporting forms in sooner rather then late. the TDF 90-22.1 forms are filed with the Dept of the Treasury in Detroit, are not part of the returns but have far more penalties involved.

Now, so far, I have not seen a single person penalized who came forward voluntarily.

We, of course would be happy to assist you with the situation.

There is no reason I know of to sell your mutual funds within the RRSP before you leave that I know of. BUT there are also special reporting rules for a Canadian RRSP which require you to file form 8891 and report the internal earnings every year to the IRS. - again - read the Oct 95 newsletter for a list.

You will also get a lot out of reading the US Canada Income Tax section under the Features Section in the top left hand corner at www.centa.com

...

US Gambling withholding tax refund - Expert Income Tax help on cross Border tax and immigration and divorce and RRSP and IRA an

Taxman — Fri, 13 Aug 2010 23:03:12 -0700

On 06/08/2010 9:16 AM, xxxxxxxxxxxxxxx wrote:

Hi David, You do this?

I have a 1042-S form with a withholding of $543.27 US. Can you get it back for me?

What is your fee? How long will it take?
Thanks, xxxxxxxxxxxxx

Tax Court Accepts IRS Method for Determining Gambling Wins and Losses

December 29, 2009

The Tax Court held in a memorandum decision released Monday that taxpayers who were casual gamblers recognized wins or losses when they redeemed their tokens and that they could not net their wins and losses across the year (Shollenberger, TC Memo 2009-306).

In this decision, the court accepted the IRS’ methodology for determining wagering gains and losses, which the Office of Chief Counsel put forth in a legal memorandum in 2008 (AM 2008-011).

The taxpayers in the case were a married couple who gambled occasionally at a casino in the small town of Charles Town, W.Va. On March 29, 2005, the husband hit a $2,000 jackpot at a dollar slot machine. The couple continued gambling and lost $400 from the jackpot; they left the casino that day with $1,600 in winnings. They did not report any gambling income on their tax return for 2005, and the IRS issued a deficiency notice for $2,000 in unreported gambling winnings.

IRC § 165(d) states that “losses from wagering transactions shall be allowed only to the extent of the gains from such transactions” but does not provide a technical definition of the terms “gains” and “losses.” As AM 2008-011 explains, the term “transactions” in section 165(d) could mean every single play in a game of chance or every wager made. That interpretation would require a taxpayer to calculate the gain or loss on every transaction separately and treat every play or wager as a taxable event and also to trace and recompute the basis through all transactions to calculate the result of each play or wager.

Because that method would be “unduly burdensome,” the IRS legal memo allows a casual gambler to recognize a wagering gain or loss at the time he or she redeems tokens.

At trial, the IRS conceded that under that method, the taxpayers should have reported $1,100 in gambling winnings rather than the $2,000 in the deficiency notice. According to the court, the lesser amount would be calculated as follows: $2,000 in jackpot winnings minus $500 in wagering money originally brought into the casino by the taxpayers minus the $400 lost by the taxpayers after the jackpot that day.

The taxpayers argued that they should be allowed to offset their gambling winnings with $2,264 of other gambling losses that they claimed to have incurred in 2005. Because section 165(d) uses the term “transactions,” the court held that the taxpayers could not net their gains and losses throughout the year. Instead, the court accepted the IRS’ treatment of transactions as occurring when the gambler cashes in his or her tokens at the end of play and held the taxpayers to have $1,100 of unreported gross income for the year.

According to the court, to allow the taxpayers to net gains and losses throughout the year would defeat the purpose of IRC § 63, under which losses of casual gamblers are allowable only as itemized deductions.

Today, I realized I have some 500 unanswered questions. I do not know how they get to be that many. I had them down to a very few at the end of December but have been swamped since and have hardly answered any even though my intention is to answer two free strange questions a day..

If your question was not answered fully or you wish to go further, I am available for individual consultations by phone or email or in person for $450 per professional hour.

If you 'really' only have a single question requiring a 'couple' of minutes, you can try phoning me for free as part of the following.

For a quick free question

You might try calling me on Fred Snyder's radio program "ITS YOUR MONEY" for an answer.

Fred Snyder's "IT'S YOUR MONEY" radio show. on CISL, 650 AM on the dial in Vancouver from 9 to 11:00 AM every Sunday (604) 280-0650 or (877) 280-0650 - You can listen live from anywhere in the world at www.am650radio.com from anywhere in the world. click on the button in the top left hand corner.

This is a live interactive program dealing mostly with Investment vehicles but we welcome tax questions and even a bit of immigration. We try and limit our calls to three or four minutes however, so make your question succinct and get that answer. If there is a follow up question, please call back.

The following was my April 27, 2008 version of a "too many questions email" when i gave up on ever getting to about 1,000 emails. The problem is that I keep on putting things aside that I want to answer but just do not get to. I have, by the way, answered over 600 unsolicited emails during this time.

david
---------------------

david ingram replies:

This email has NOT been read because of the sheer number received each day. Two unidentified emails are picked to be answered each day. The rest receive this email. Contact information is provided further on. As I am amending / updating this automatic reply, there are over 400 today. I have cleaned out over 45,000 messages from my spam box and over 14,000 that I actually looked at and deleted. Sometimes, you will receive this a loooonnnnggg time later. This is because I put it aside to answer and finally gave up at ever getting at two or three hundred of them.

In general, I pick out two or three or four random questions to answer a day. Unfortunately, I am sorry that I cannot reply to your question at the moment because you do not show as a client. If I am incorrect and you are a client with a new email address, etc., please resend your question or inquiry with YOUR NAME (i.e. John Smith) and the words "PAYING CUSTOMER" in the subject matter. Please indicate when you saw me or consulted me in the last six months and what name the bill would have been under. I am also going to limit my free follow up questions to two from now on.

That does NOT mean I am going to charge automatically for the question. A simple yes or no question is never charged for. However, it does identify your question as being a priority and should stop it from being spammed out or automatically sent this rejection letter.

At the moment, I am limiting my free replies to two to four per day (I get up to 50 questions) from non-clients. I am just too busy to answer many questions and am limiting myself to 2 a day except for my regular paying customers whom I do my damnedest to answer the same day. And, if I have already answered one of yours free in the last six months, it is unlikely that the system will let you through with another free one now. And, if i have not answered a client's question within 48 hours, it is unlikely that it survived the filters and you should resend it or phone (604) 980-0321 to point out that you are a client and that this is one of your two follow-up questions.

If you are not an existing client and decide to retain me to answer your question(s), please be advised that I have a minimum charge of $450 Canadian (plus GST if in Canada - as shown in the suggested price guidelines in RED below. Please call Gillian Bryan or Peter Ingram at (604) 980-0321 to set up a phone consultation time.

They will ask you to email your question again (likely with more detail since you are paying for it) to myself taxman@centa.com and either Peter at peter@centa.com or Gillian at gillian@centa.com and they will set up a phone consultation time for us to talk.

I am, however, adding your name to our Q & A list and another question may answer yours. AND, I have answered over 8,000 questions at http://www2.jurock.com/askexpert/expert.asp?aid=121&cid=63 or www.centa.com (see the archives) and you should be / might be able to find your answer by going there or more specifically, to http://www.centa.com/search.htm

(To be removed from that list, reply to taxman@centa.com with 'Please Remove' in the Subject)

However, if you can not find your answer at the site, answers to this and other similar questions can be obtained 'FREE' on Air on that First Sunday of every month on CISL as above or most Sunday Evenings and always on the first Sunday Evening of each month

And as I said, on the FIRST Sunday of each month, I will guest with Fred Snyder from 9 AM to 11:00 AM on CISLE 650 on the AM Dial. This is also a live phone in show and we take calls.

Callers to the Shows can also come out on Thursdays at noon or 7PM at night to one of our Fred's free seminars at his office at 1764 West 7th in Vancouver.. Each one of the 2 1/2 hour seminars devotes at least 20 minutes to mortgaging and making all interest deductible

Every Thursday noon and evening, Fred Snyder of Dundee Wealth Management conducts one of 23 different financial seminars at his office

Time:    7:00 to 9:30 PM
Date:    Every Thursday evening
Place    1764 West Seventh
             Vancouver (corner of Burrard)

Phone (604) 731-8900 to register and there is usually a Noon hour seminar as well.   At the noon hour seminar, Fred even provides Sandwiches and coffee.

No cost - no obligation

Topics always cover mortgage interest as a deduction

other topics - getting the mortgage, estate planning, critical care insurance, income taxation (3 nights), differences between stocks and bonds, and usually the most innovative HELOC mortgage offered in Canada from Manulife Bank as presented by Stuart Rodger of Manulife (604) 351-6133,

Those on Vancouver Island can attend Ralph Hahmann's Tuesday Evening Seminars on McKenzie Avenue in Victoria. (250) 472-0700.Ralph is also with Dundee Wealth Management and is a specialist in Pension Payouts and the co-author of the best selling book, "the Pension Paradigm:.

---------------------------------------------------------------------------------------------------------------

SUGGESTED PRICE GUIDLELINES - April 26, 2008

david ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:

4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
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 or phone outside of those hours as this is a home office) expert US Canada Canadian American Mexican Income Tax service help.

email to taxman@centa.com
www.centa.com www.david-ingram.com

pert US Canada Canadian American Mexican Income Tax service and help.

Phone 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 if in Canada) expert US Canada Canadian American Mexican Income Tax service and help.

This is not intended to be definitive but in general I am quoting $900 to $3,000 for a dual country tax return.

$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 rental

$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 minutes.

$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 countries

$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 returns

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 $250.

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 each.

18 RRSPs would be $900.00 - (maybe amalgamate 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 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 $12,000 refund.

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.

...

How to get a U.S. working visa when spouse has a TN - Susan's Story - Expert Income Tax help on cross Border tax and immigration

Taxman — Fri, 13 Aug 2010 10:43:57 -0700

On 08/08/2010 2:17 PM, XXXXXXXX wrote:

Below is the result of your feedback form.  It was submitted by
XXXXXXXXX on Sunday, August 8, 2010 at 14:17:50
---------------------------------------------------------------------------

My_question_is: Both

question: Hi,
I am a Canadian citizen. My husband and I own a home in Phoenix AZ and I have been 
going back and forth every couple of months. I am under my husband's TN status, 
which means I cannot work. However, I would really like to. 

I am not a professional as described under NAFTA. 

All my experience has been in office administration. 

Besides the sponsorship under my sister's status (which could take years), do you 
have any other recommendation as to how I can get a working visa so that I can also 
bring in an income?

Any information you can provide me would be greatly appreciated. Thanks so much!!

----------------------------

---------------------------------------------------------------------------

david ingram replies:

If you can find a supervisory or management job, You can qualify for an H visa. They take longer to get and have limitations in that you can only stay for 7 years or so under an H visa unless you get a green card.

They also have a problem when tied to someone else with a TN. If you are getting an H visa, make sure hubby gets one too (also).

You can also telecommute back to Canada if you could find that kind of job.

Otherwise, you are out of luck.

Women in your position (particularly when children are involved) become third class citizens

Read Susan's story at

http://www.centa.com/article.php/CanWeekofMon20080818000892.html

If you 'really' only have a single question requiring a 'couple' of minutes, you can try phoning me for free as part of the following.

- For a quick free question

You might try calling Fred Snyder's radio program for an answer on a Sunday Morning..

Fred Snyder's "IT'S YOUR MONEY" radio show. on CISL, 650 AM on the dial in Vancouver from 9 to 11:00 AM every Sunday (604) 280-0650 or (877) 280-0650 - You can listen live from anywhere in the world at www.am650radio.com from anywhere in the world. click on the button in the top left hand corner.-
- You might try calling Fred Snyder's weekly radio programs for an answer.

Circular 230 Disclosure: Pursuant to recently-enacted US Treasury Dept. regulations, we are now required to advise you that, unless otherwise expressly indicated, any federal tax advice contained in this communication, including attachments and enclosures, is not intended or written to be used, and may not be used, for the purpose of (i) avoiding tax-related penalties under the internal revenue code or (ii) promoting, marketing, or recommending to another party any tax-related matters addressed herein.
Privileged and Confidentiality Notice: This electronic transmission (and/or the documents accompanying it) may contain confidential information belonging to the sender. The information is intended only for the use of the individual or entity to which it is addressed. If you are not the intended recipient, you are hereby notified that any disclosure, copying, distribution, electronic storing, or the taking of any action in reliance on the contents of this information is strictly prohibited. If you have received this transmission in error, please immediately notify the sender by reply e-mail and immediately delete this record from your computer system.

david ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:

4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325

email to taxman@centa.com
www.centa.com www.david-ingram.com

pert US Canada Canadian American Mexican Income Tax service and help.

...

Collecting Canada Pensions while living in the US - Windfall Elimination Provision (WEP) Florida Oklahoma - Expert Income Tax he

Taxman — Tue, 10 Aug 2010 11:17:27 -0700

Please tell me your consultation fee...

Dear David,

My husband, Canadian citizen born 1945 in Quebec, Canada, moved to NYC and worked there 7 years. Returned to Quebec, Canada for 18 years. Moved back to US and has worked here 16 years now. We live in US and are both US Citizens.

xxxxx just turned 65 and is ready to apply for SSI, CPP, QPP and OAS, but we're confused and want to be crystal clear about his pension options and all the tax implications.

Do you offer phone consultations? What is your fee?

Many thanks,

david ingram replies:

He should just put his applications in. Social security will use the Windfall Elimination Provision (WEP) to reduce his Social security because he has not put in 30 years of Social security contributions.

However, he did put in over 20 years of life in canada after turning 65 so he can take a proportional OAS with him to the USA. His Quebec Pension Plan will also be prorated by 25/40 times what ever his pension would have been if he had put in 40 years.

He has to tell US social security that he is entitled to the Quebec Pension and OAS and he has to tell the QPP that he is getting the Social security.

The Social security administration and the QPP will then figure it out.

The WEP clawback of Social security is not just a US Canada situation either. If a School teacher taught in Florida for 20 years and Oklahoma for 20 years, they would also suffer under WEP. WEP takes into account the years that someone worked but did not contribute to Social security because they worked at an occupation which was not covered because an employer group, a religious organization or in your husband's case, another country had a program of their own. In this case, Florida Teachers belong to a State retirement system and do not pay into social security. Oklahoma teachers do pay social security.

An explanation of WEP and its rationale can be found at

http://www.ssa.gov/pubs/10045.html
-----------------------------------------------------------
If your question was not answered fully or you wish to go further, I am available for individual consultations by phone or email or in person for $450 per professional hour.

Please also note that we prepare Canadian, US, Australian, UK and New Zealand returns on a mail in, email, fax, snail mail or couriered basis. At any time, our clients are in 40 countries or more. They have every occupation from nuclear Submarine captains to FedEx pilots to Major Bank officers to Politicians, Diplomats and border patrol officers. My favourite, however, is a penguin catcher in Antarctica among others there..

If you 'really' only have a single question requiring a 'couple' of minutes, you can try phoning me for free as part of the following.

- For a quick free question

You might try calling Fred Snyder's radio program for an answer on a Sunday Morning..

Fred Snyder's "IT'S YOUR MONEY" radio show. on CISL, 650 AM on the dial in Vancouver from 9 to 11:00 AM every Sunday (604) 280-0650 or (877) 280-0650 - You can listen live from anywhere in the world at www.am650radio.com from anywhere in the world. click on the button in the top left hand corner.-
- You might try calling Fred Snyder's weekly radio programs for an answer.

Circular 230 Disclosure: Pursuant to recently-enacted US Treasury Dept. regulations, we are now required to advise you that, unless otherwise expressly indicated, any federal tax advice contained in this communication, including attachments and enclosures, is not intended or written to be used, and may not be used, for the purpose of (i) avoiding tax-related penalties under the internal revenue code or (ii) promoting, marketing, or recommending to another party any tax-related matters addressed herein.
Privileged and Confidentiality Notice: This electronic transmission (and/or the documents accompanying it) may contain confidential information belonging to the sender. The information is intended only for the use of the individual or entity to which it is addressed. If you are not the intended recipient, you are hereby notified that any disclosure, copying, distribution, electronic storing, or the taking of any action in reliance on the contents of this information is strictly prohibited. If you have received this transmission in error, please immediately notify the sender by reply e-mail and immediately delete this record from your computer system.

david ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:

4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325

email to taxman@centa.com
www.centa.com www.david-ingram.com

pert US Canada Canadian American Mexican Income Tax service and help.

...

Canadian Snowbirds article April 1994 at http://www.centa.com/staticpages/index.php/April1994CEN-TAPEDE

Taxman — Fri, 30 Jul 2010 13:48:27 -0700

This should properly be read in conjunction with the April 1994 newsletter. This April 1994 newsletter was the basis for the CRA's Snowbird Pamphlet.

http://www.centa.com/staticpages/index.php/April1994CEN-TAPEDE

On 28/07/2010 6:17 PM, xxxxxx xxxxxxxx wrote:

I found your April 1994 article on Snowbirds and cabins across the border....very interesting. I was wondering if you would comment on the recent issue of the Canadian Snowbirds Association article which states

How long can I visit the U.S.?

A Canadian citizen who is granted entry into the United States under a B-2

Visitors Visa may be permitted to remain in the country for six months less

a day. This could be 181, 182 or 183 days, depending on the date on which

you enter. It is important to note that each time you enter the United States,

even just for a few hours, it counts as one day. Each day that you visit the

U.S. in a 12-month period will be counted and should be subtracted from

the “six months less a day” that you intend to visit the United States in the

winter.

Also, when you enter the U.S. for an extended period, such as six months,

shorter trips outside of the country departing from and returning to the

U.S. do not count as days that you can subtract from your “six months less

a day” count. This is the case even if you return to Canada for a week or two

during the holiday season.

It is important to note that a U.S. Customs and Border Protection officer

has the authority to limit your visit to the United States to any period of

time that he/she sees fit. So, do your best to be accommodating when they

question your intentions and length of stay. The wrong attitude could cost

you days in the sun.

For more information, visit snowbirds.org and refer to the Travelers’

Information Guide. The revision dated February 1, 2010 and titled “How

Long Can I Visit?” provides specific information on this topic.

I can not find anything on the internet that supports the above concerning coming home for Xmas....that you can deduct those days from the 182 days.

I would really appreciate your opinion on this matter. And I would also like to know if your 1994 article is still accurate...or have some laws changed?

Thank you

xxxx xxxxxxx

----------------------------------
david ingram replies:

First of all, i agree with the article's premise that the US Customs and border Protection Officer is all powerful when you are crossing the border.

And

It may well be that the policies (as i understand them) have changed.

I have always understood that you re-qualify for your paperless B1 / B2 status each and every time you cross the border. I have never heard that a Canadian gets six months on that first visit and then has to fit into that six months.

Normally, I would bow to anything that the Snowbird association said but i have just fixed a batch of tax returns for US citizens living in Canada and snowbirding who were told by 'someone' at the Snowbird association that they could file form 8848 and not fill in a 1040. BAD, BAD, advice.

The 183 day rule is most important for the purposes of the Income tax return.

If you find yourself in the USA for more than 183 days in total for the year. as in 5 months for the winter and a month in Alaska in the summer and a couple of other weeks, you must now file a US 1040 tax return.

Under the substantial presence test, if you are there for 125 days a year 3 years in a row, you need to file a form 8848 and a 1040NR for each of you.

I stand by the April 1994 newsletter (which anyone else can read in the top left hand corner at WWW.centa.com).

There are Homeland Security people who receive this and I welcome any comments they wish to make.

By the way, I am NOT on the radio program this next Sunday on Aug 1, 2010. I will be entry 18 out of 145 in the Vancouver PRIDE parade.

...

Canadian Citizen w/ US green card cashing money order in US - US FINCEN forms 104 and 105 - Canada FINTRAC forms E667 and E677 -

Taxman — Thu, 15 Jul 2010 22:45:33 -0700

On 11/05/2010 2:35 PM, XXXXX wrote:

Below is the result of your feedback form.  It was submitted by
XXXXX                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  on Tuesday, May 11, 2010 at 14:35:06
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My_question_is: Both

question: I am a Canadian Citizen but I am currently working in the US (
I have my green card).  

Canada relatives are going to lend me money for downpayment on a house that I want to buy in the US. 

I will be getting $50,000 US probably  via money order.  

Do I have to report to Canada and/or US regarding this transfer of money from Canada to US?  Is it easier if I tell my aunt to e-wire the money from her Canadian bank to my US one instead?

-------------------------------------

david ingram replies

If the money is in cash and you are going to drive it across the border or FedEx it, you must file Canadian Form E677 and hand it in as you leave the country and you must hand in US form 105 as you enter the US to avoid the strong possibility of the seizure of the money and fines of up to $500,0000 plus incarceration of up to 5 years.

If your aunt transfers it electronically, you do not need to anything because the Canadian Bank will file form E667 and the US bank will file form 104 for you.

In general a Money order or other monetary instrument that needs to be endorsed does NOT need to be reported by you. The banks will look after the reporting.

see forms at:

Your US report
http://www.fincen.gov/forms/files/fin105_cmir.pdf

The bank's US report
http://www.fincen.gov/forms/files/fin104_ctr.pdf

Your Canadian report
http://cbsa-asfc.gc.ca/publications/forms-formulaires/e677.pdf

The Canadian bank's report
http://cbsa-asfc.gc.ca/publications/forms-formulaires/e667.pdf

The bank's Canadian Report
http://cbsa-asfc.gc.ca/publications/forms-formulaires/e667.pdf

Your Canadian report
http://cbsa-asfc.gc.ca/publications/forms-formulaires/e677.pdf

Circular 230 Disclosure: Pursuant to recently-enacted US Treasury Dept. regulations, we are now required to advise you that, unless otherwise expressly indicated, any federal tax advice contained in this communication, including attachments and enclosures, is not intended or written to be used, and may not be used, for the purpose of (i) avoiding tax-related penalties under the internal revenue code or (ii) promoting, marketing, or recommending to another party any tax-related matters addressed herein.
Privileged and Confidentiality Notice: This electronic transmission (and/or the documents accompanying it) may contain confidential information belonging to the sender. The information is intended only for the use of the individual or entity to which it is addressed. If you are not the intended recipient, you are hereby notified that any disclosure, copying, distribution, electronic storing, or the taking of any action in reliance on the contents of this information is strictly prohibited. If you have received this transmission in error, please immediately notify the sender by reply e-mail and immediately delete this record from your computer system.

david ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:

4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325

email to taxman@centa.com
www.centa.com www.david-ingram.com

pert US Canada Canadian American Mexican Income Tax service and help.

...

Need manager if doing all work online from Canada? Arizona Hotel Rental Needs to charge hotel tax. Expert Income Tax help on cro

Taxman — Thu, 08 Jul 2010 22:43:52 -0700

Below is the result of your feedback form.  It was submitted by
XXXXX XXXX on Thursday, July 8, 2010 at 19:08:27
---------------------------------------------------------------------------

My_question_is: US-specific

question: Hello, this is a fantastic site!  Thank you so much for making your knowledge so accessible. 
I own a luxury furnished condo in Arizona and am going to rent out weekly. 

My plan is to advertise it on a rental site such as VRBO and to receive payment online while in Canada through a paypal account or by cheque.

I would have an American cleaning crew and someone on site to providing entry access (not me). 

Do I still need a manager for this work to keep myself out of trouble? Thank you

---------------------------------------------------------------------------

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david ingram replies:

Whether you collect the money in Canada or the state of Washington or in Arizona, you must still collect the hotel transient tax since your rentals are for less than 29 days and are in the state of Arizona.. The State tax rate is 7.27% and the County also collects another tax

Scottsdale, for instance collects 5% hotel transient tax for a total tax you must collect 12.27%.

i.e. if you were to charge $1,000 for a week, you would need to collect $1,122.70 and remit the $122.70 to the Tax authorities on a monthly basis.

Do not ignore this. If they catch up to you three years from now, you will be in deep deep doo doo.

I have seen a West Vancouver owner of A Hawaii Condo have the unit seized by the State of Hawaii for failure to file her GET returns for 14 years.

In addition to the transient tax, Scottsdale, for instance has another tax of 1.65% which applies to commercial properties or residential properties where the owner has more than 2 ordinary residential properties. A transient condo rented by the week or day is generally considered a COMMERCIAL property.

Be careful with what you are doing.

In addition to the Arizona transient Hotel taxes, every year you will have to file a a US 1040NR with a schedule C and schedule 4562 to report the business income --- A rental residential condo would be a Schedule E but a hotel room is a business.

You will also need to file an Arizona 140NR return and include a copy of the 1040NR with the 140NR,.

And then, you have to convert all the figures to Canadian Dollars and put them on your Canadian return on a Schedule 2025.

IF YOU PAID ANY TAX TO Arizona or the feds, you will have to include a copy of the 1040NR and the 140NR and Schedule C and 4562 with your Canadian return to claim the foreign tax credit on Canadian forms 2209 and 2036.

As described you do NOT need a rental manager although their services could be useful when it comes to dealing with a lot of factors and filing the Hotel Tax returns on a regular basis.

Circular 230 Disclosure: Pursuant to recently-enacted US Treasury Dept. regulations, we are now required to advise you that, unless otherwise expressly indicated, any federal tax advice contained in this communication, including attachments and enclosures, is not intended or written to be used, and may not be used, for the purpose of (i) avoiding tax-related penalties under the internal revenue code or (ii) promoting, marketing, or recommending to another party any tax-related matters addressed herein.
Privileged and Confidentiality Notice: This electronic transmission (and/or the documents accompanying it) may contain confidential information belonging to the sender. The information is intended only for the use of the individual or entity to which it is addressed. If you are not the intended recipient, you are hereby notified that any disclosure, copying, distribution, electronic storing, or the taking of any action in reliance on the contents of this information is strictly prohibited. If you have received this transmission in error, please immediately notify the sender by reply e-mail and immediately delete this record from your computer system.

david ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:

4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325

email to taxman@centa.com
www.centa.com www.david-ingram.com

pert US Canada Canadian American Mexican Income Tax service and help.

...

USA Deemed-Resident vs. Non-Resident House Sale - Expert Income Tax help on cross Border tax and immigration and divorce & R

Taxman — Tue, 22 Jun 2010 22:08:10 -0700

My_question_is: Applicable-to-other-jurisdiction

question: Dear David

I have lived in the UK for 10 years, mostly as a graduate student, and recently (2009) gained residency. My wife is a dual Canadian/UK citizen and has filed taxes as a UK resident since 2006. I own a house in Toronto, which I have rented since moving here. I have paid taxes on the income (and all other investment income) as a Canadian resident. I have noted filed an NR6. For 2009 I am filing (late) as a "deemed-resident" rather than as a "non-resident", on the advice of my accountant. I am currently in the process of selling the house, but I am concerned about my residency status. I have the following questions:

1) Does filing as a "deemed resident" pose problems, especially for selling a house?
2) Will I be penalized for not filing an NR6?
3) If I return to Canada before the sale, and take up occupancy in the house, does that re-establish my principle residence status?

Thanks

3) If I filed income in the UK,

david ingram replies:

You need more detailed advice than this response is likely to give you.

And the answer i am giving is good if you were in the United State, UK, Australia or another 100 tax treaty countries.

Graduate students are usually paid where they are studying / working.

If you were being paid in the UK, then your UK wages had to be put on the Canadian return. They were not necessarily taxable in Canada, because you could claim a Foreign tax credit for the taxes paid to the UK on Canadian forms 2209 and 2036.

Students are usually allowed to remain tax residents of their home country for up to five years. If that is / was the case, you would have become a tax resident of the UK in 2005 or 2006 and had to give up any Provincial Hospitalization or medical plan and your Canadian Provincial driver's licence.

At the same time, under Article IV of the UK Canada Tax Treaty there is little doubt that you have been a tax resident of the UK since 2006 or earlier. you have not had a home available to you in Canada since you rented out the house ten years ago..david ingram replies:

You need more detailed advice than this response is likely to give you.

And the answer i am giving is good if you were in the United State, UK, Australia or another 100 tax treaty countries.

Article 4

Fiscal Domicile

1. For the purposes of this Convention, the term "resident of a Contracting State" means any person who, under the law of that State, is liable to taxation therein by reason of his domicile, residence, place of management or any other criterion of a similar nature. But this term does not include any person who is liable to tax in that Contracting State in respect only of income from sources therein.

2. Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined as follows:

(a) he shall be deemed to be a resident of the Contracting State in which he has a permanent home available to him. If he has a permanent home available to him in both Contracting States, he shall be deemed to be a resident of the Contracting State with which his personal and economic relations are closer (centre of vital interests);

(b) if the Contracting State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either Contracting State, he shall be deemed to be a resident of the Contracting State in which he has an habitual abode;

(c) if he has an habitual abode in both Contracting States or in neither of them, he shall be deemed to be a resident of the Contracting State of which he is a national;

(d) if he is a national of both Contracting States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.

3. Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, the competent authorities of the Contracting States shall by mutual agreement endeavour to settle the question and to determine the mode of application of the Convention to such person.

The house in Canada became taxable for Capital Gains tax on one of two dates.

1.     The date you left he Country if you are deemed a non-resident

or

2.    The date you rented it out for the first time UNLESS you filed an election under section 45(2) to keep it as your principal residence even though you did not live there. For this to be valid, the election had to be filed with the first rental return and is only good for 4 years although the necessary form that needs to be filed actually gives you 5 years tax free.

In that case and only "IF" you filed the election and if you were a valid student out of the country, you can claim the house gain tax free for 5 out of the 10 years but again there is a big "IF"

If you claimed depreciation on the property even once in ten years, you can NOT claim it tax free from the day you rented it out. In that case, you will owe capital gains tax on any profit from the day you left.

If you return to Canada and move in to the previously rented house, you have a deemed disposal and owe tax on the increased value immediately although you can defer the tax until actual sale under section 45(3) of the tax act IF and I say IF you did not claim any depreciation or CCA (Capital Cost Allowance) during any of the ten years it was rented. this is of absolutely NO advantage if you have the house for sale already.

You likely need a new accountant. It does not sound to me that your present help understands out of country returns.Article 4

Fiscal Domicile

2. Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined as follows:

(c) if he has an habitual abode in both Contracting States or in neither of them, he shall be deemed to be a resident of the Contracting State of which he is a national;

(d) if he is a national of both Contracting States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.

If your question was not answered fully or you wish to go further, I am available for individual consultations by phone or email or in person for $450 per professional hour.

If you 'really' only have a single question requiring a 'couple' of minutes, you can try phoning me for free as part of the following.

(To be removed from that list, reply to taxman@centa.com with 'Please Remove' in the Subject)

And as I said, on the FIRST Sunday of each month, I will guest with Fred Snyder from 9 AM to 11:00 AM on CISLE 650 on the AM Dial. This is also a live phone in show and we take calls.

---------------------------------------------------------------------------------------------------------------

SUGGESTED PRICE GUIDLELINES - April 26, 2008

david ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:

4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325

email to taxman@centa.com
www.centa.com www.david-ingram.com

pert US Canada Canadian American Mexican Income Tax service and help.

This is not intended to be definitive but in general I am quoting $900 to $3,000 for a dual country tax return.

$1,200 would be the same with one rental

$1,300 would be the same with one business no rental

$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 countries

$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 returns

With a Rental for $400, two or three rentals for $550 to $700 (i.e. $150 per rental) First year Rental - plus $250.

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 each.

18 RRSPs would be $900.00 - (maybe amalgamate a couple)

Capital gains *sales) are likely $50.00 for the first and $20.00 each after that.

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.

...