I am writing to you today to see if you can be of service to me. I am detailing here some information about our current situation, and what our existing accountant and an accountant in Canada has advised us to do. A friend recommended that I run this by you to see if it makes sense. I will be relocating to Canada after having lived for 13 years in the USA. We are returning Canadian citizens (Canadian passports), having been in the USA with Greencards until now. My wife will not be working when we return, and we have two children (6 and 4). I will be operating a home-based consulting business, providing all my services to a single USA client. I may branch out to other clients in the future, but for now, the USA client will be using all my services (plus minor expenses such as paper, ink cartridges, Internet connection, etc.) I expect to bill the US client approximately $120,000+ US/year (roughly $140K Canadian). Other expenses, such as office furniture, electricity, etc., will be considered my own business expenses. I do not need to incorporate and will be able to charge 0% GST for the services I will be providing to the US client(s). Income splitting, employing my wife in the business, will most likely be a good idea to reduce our taxes. The USA client has no presence in Canada. I have ownership in several other companies in the USA which I hope to maintain (all small LLC that produce a loss or bearly break-even). In the USA, I will be filing taxes only for the profit/loss for these companies (K1 Schedule) and will be drawing no income from any of them. I assume, since none of the profit/loss on the foreign investment will be pulled into Canada, that this is not taxable in Canada. All profit/loss from the US ventures will remain in the USA. We will be selling our house here in the US and moving back to Canada in July. The funds will be transferred electronically to a Canadian financial institution. We know that we need customs paperwork for the vehicles and belongings, and that we will be paying GST for the excess over $10,000 on the value for any of our vehicles and boat. I will be maintaining a US bank account and still have IRAs in the US. These will remain in the US, and I understand that any funds transferred from the US bank account to Canada will be taxable and viewed as income. I'm not sure on what to do about the IRA we have here. I guess that is the main reason why I wrote. I am only 38 right now, so there is still some time before I plan on pulling funds. Let me know what you think and whether or not you can assist me. Sincerely, -------------------------------------------------------- david ingram replies: You are likely making a mistake to come back to Canada without taking out US citizenship first. You "can" file Form I-131 first and this gives you the right to keep your green cards alive. on an annual basis but you have to fill one out each year. Keeping yours alive allows you to continue to work in the US but it is my experience that 4 or 5 years is about the most they can be renewed. The longest I ever saw I-131 forms to keep a green card alive before the family made the decision to move back to the US was 8 years .. Taking out your US citizenship allows you to move freely across the border both ways. I do not know what you do but if you lose the present contract for any numb er of reasons I can think of and you need more American business because the xxxxxxxxxx market is a little weak, you will / could find yourself unable to replicate what you did in the past. I started d what I do at 2000 Pembina Highway in Fort Gary , Manitoba and can testify from first hand experience that I wish i had taken out US citizenship before returning to Canada 40 years ago. The IRA is simple, You can just leave it where it is for another 20 or 23 years and then take it out as a pension or you can take it out now, pay the tax and penalty in the US and roll it into an RRSP, and then use the tax paid to the US (less the 10% penalty) as a foreign tax credit in Canada. I do NOT recommend this process. My suggestion is that you take out US citizenship before returning to Canada. Anything you receive on a K-1 is taxable in Canada whether you take the money to Canada or not. If it is credited to your account by raising the ACB, it is taxable. I searched Yahoo for you and found you all over the place with references to status in several different ventures, You can be part and parcel of all those with a Green card or US citizenship. If you return to Canada and then want to go down to work for one of them (maybe to save your investment), you will need an individual visa for each company. A foolish move (in my opinion) for someone of your obvious stature. I know you would rather be fishing but you are going out without an obvious and easily obtained life jacket. ----------------------------------- David Ingram specializes in giving expert income tax and immigration help to American and Canadian citizens living out of their home countries from Zimbabwe to Saudi Arabia to Mexico to China or Chile - Cross border, Non-resident - dual citizen - out of country investments are all handled with competence and authority. international non-resident cross border income tax help assistance expert preparation & immigration consultant david ingram, experts on rentals mutual funds RRSP RESP IRA 401(K) & divorce preparer preparers consultants New York, Boston, Sacramento, Minneapolis, Salem, Wheeling, Philadelphia, Pittsburgh, Atlanta, Pensacola, Miami, St Petersburg, Naples, Fort Myers, Cape Coral, Orlando, Atlanta, Arlington, Washington, Hudson, Green Bay, Minot, Portland, Seattle, St John, St John's, Fredericton, Quebec, Moncton, Truro, Atlanta, Charleston, San Francisco, Los Angeles, San Diego, Sacramento, Taos, Grand Canyon, Reno, Las Vegas, Phoenix, Sun City, Tulsa, Monteray, Carmel, Morgantown, Bemidji, Sandpointe, Pocatello, Bellingham, Custer, Grand Forks, Lead, Rapid City, Mitchell, Kansas City, Lawrence, Houston, Albany, Framingham, Cambridge, London, Paris, Prince George, Prince Rupert, Whitehorse, Anchorage, Fairbanks, Frankfurt, The Hague, Lisbon, Madrid, Atlanta, Myrtle Beach, Key West, Cape Coral, Fort Meyers, Berlin, Hamburg Warsaw, Auckland, Wellington, Honolulu, Maui, Kuwait, Molokai, Beijing, Shanghai, Tokyo, Manilla, Kent, Winnipeg, Saskatoon, Regina, Red Deer, Olds, Medicine Hat, Lethbridge, Moose Jaw, Brandon, Portage La Prairie, Davidson, Craik, Edmonton, Calgary, Victoria, Vancouver, Burnaby, Surrey, Edinburgh, Dublin, Belfast, Glasgow, Copenhagen, Oslo, Munich, Sydney, Nanaimo, Brisbane, Melbourne, Darwin, Perth, Athens, Rome, Berne, Zurich, Kyoto, Nanking, Rio De Janeiro, Brasilia, Colombo, Buenos Aries, Squamish, Churchill, Lima, Santiago, Abbotsford, Cologne, Yorkshire, Hope, Penticton, Kelowna, Vernon, Fort MacLeod, Deer Lodge, Springfield, St Louis, Centralia, Bradford, Stratford on Avon, Niagara Falls, Atlin, Fort Nelson, Fort St James, Red Deer, Drumheller, Fortune, Red Bank, Marystown, Cape Spears, Truro, Charlottetown, Summerside, Niagara Falls, Albany Zimbabwe David Ingram expert income tax help and preparation of US Canada Mexico non-resident and cross border returns with rental dividend wages self-employed and royalty foreign tax credits international non-resident cross border income tax help assistance expert preparation & immigration consultant david ingram, experts on rentals mutual funds RRSP RESP IRA 401(K) & divorce preparer preparers consultants This from "ask an income tax and immigration expert" from www.centa.com or www.jurock.com or www.featureweb.com. David Ingram deals on a daily basis with expatriate tax returns with: multi jurisdictional cross and trans border expatriate problems for the United States, Canada, Mexico, Great Britain, United Kingdom, Kuwait, Dubai, Saudi Arabia, Thailand, Indonesia, Japan, China, New Zealand, France, Germany, Spain, Italy, Russia, Georgia, Brazil, Peru, Ecuador, Bolivia, Scotland, Ireland, Hawaii, Florida, Montana, Morocco, Israel, Iraq, Iran, India, Pakistan, Afghanistan, Mali, Bangkok, Greenland, Iceland, Cuba, Bahamas, Bermuda, Barbados, St Vincent, Grenada,, Virgin Islands, US, UK, GB, and any of the 43 states with state tax returns, etc. Rockwall, Dallas, San Antonio Houston Denmark, Finland, Sweden Norway Bulgaria Croatia Income Tax and Immigration Tips, Income Tax Immigration Wizard Antarctica Rwanda Guru Consultant Specialist Section 216(4) 216(1) NR6 NR-6 NR 6 Non-Resident Real Estate tax specialist expert preparer expatriate anti money laundering money seasoning FINTRAC E677 E667 105 106 TDF-90 Reporting $10,000 cross border transactions Grand Cayman Aruba Zimbabwe South Africa Namibia help USA US David Ingram's US/Canada Services US / Canada / Mexico tax, Immigration and working Visa Specialists US / Canada Real Estate Specialists Home office 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 10 PM 7 days a week (please do not fax or phone outside of those hours as this is a home office) email to taxman at centa.com www.centa.com www.david-ingram.com Disclaimer: This question has been answered without detailed information or consultation and is to be regarded only as general comment. 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