October, Nov, & Dec/1994 Pages 69-77
the CEN-TA PEDE
david ingram's US/Canadian Newsletter
In this Issue:
1. $100,000 "LAST CALL" Does it affect your US return? NO!! 69
2. US MOTHERS ADDED FOR CITIZENSHIP 69
3. You may be a US Citizen and NOT know it (Children born
before May 24, 1934 of US Mothers added Oct, 1994 70
4. The T664 - At Loooooong LAST! - THE FORM 71
5. Request for Information 73
The Canadian $100,000 TOP UP Exemption does NOT AFFECT your US Return.
MOM's an American, ARE YOU NOW A US CITIZEN? - MAYBE YES, MAYBE NO!
President Clinton signed a Technical Amendment Act in October and made another 400,000 to 1,000,000 Canadians instant Americans. The chart (amended from our June Newsletter) shows how. If you were born before May 24, 1934 and your mother was a US citizen and had ever lived in the US, YOU ARE A US citizen and have no choice. Depending upon when your children were born and whether you ever spent some time in the US (2 years at college for instance) some or all of your children may be US citizens. This may be GOOD news. It may be BAD news. IF YOU ARE A US CITIZEN, IT IS JUST AS IMPORTANT TO FILE A US TAX RETURN AS A CANADIAN RETURN, EVEN IF YOU HAVE NO US SOURCE INCOME. If you give up your citizenship to avoid this income tax, the IRS law still gives them the right to tax you for income, gift, and estate tax for 10 more years. If you die in this time, your executor is responsible to prove that you did not give up your citizenship to avoid income, gift or estate tax. GOOD LUCK!
In other words, if your Canadian born mother's parents were Americans by birth or naturalization and one of them had lived in the states at any time for any period, and you were born between 05/24/34 and 01/12/41 and YOU lived in the United States for 2 years between ages 14 and 28, you are a US citizen whether you want to be or not and MUST file US tax returns. Similarly, since you are a US citizen who has been physically present (trailer at Birch Bay, Phoenix condominium) in the US for a few years (2 after age 14), and you have a child born after November 13, 1986, that child is a US citizen.
Pages 71 and 72 of this newsletter is a replication of the FORM T664 which is the form necessary to claim the $100,000 exemption. There are two important things to note here.
1. It is possible to file the form late. If you do, there is a penalty based upon the number of months. IN MOST CASES THE PENALTY WILL BE LESS THAN THE CHARGES YOU WILL PAY YOUR ACCOUNTANT FOR EXTRA SERVICE FROM NOW TO APRIL 30TH.
2. Be careful about your appraisal. If you overestimate the value by more than 10%, the penalties are worse than filing late or amending. (if challenged six years later).
If you wish my 10 page analysis of the situation, FAX your request to me at (604) 649-4759.
You should send REVENUE CANADA a request for the information shown on page 73.
For determining whether LEGITIMATE CHILDREN BORN OUTSIDE THE U.S.
acquired U.S. citizenship at birth.
PERIOD | PARENTS | RESIDENCE REQUIRED OF:
| | PARENT or | CHILD .
STEP 1 | STEP 2 | STEP 3 | STEP 4 .
Select | Select | Measure citizen parent's residence | Determine whether child
period in | applicable | against the requirements for the | has since lost U.S.
which | parentage | period in which child was born. | citizenship. (The child
child was | | (The child acquired U.S. citizen- | lost on the date it became
born. | | ship at birth if, at time of the | impossible to meet the
| | child's birth, citizen parent had | necessary requirements,
| | met applicable residence | never before age 26.)
| | requirements.) | .
Prior to | one parent | Citizen parent had resided in the | None.
05/24/34 | US citizen | U.S. (Originally only fathers could |
| | transmit; mothers added Oct, 94) | [see note (5)] .
On/after | Both are | One had resided in the U.S. | None.
05/24/34 | citizens | | .
& prior to | One citizen | Citizen had resided in the U.S. | 5 year's residence in the
01/13/41 | one alien | | U.S. or its outlying
| parent. | | possessions between ages of
On/after | One citizen | Citizen had resided in U.S. or its | 13 and 21. OR, 2 years'
01/13/41 | one alien | outlying possessions 10 years, at | continuous presence in
and prior | parent. | least 5 of which were after age | U.S. between ages 14 and
to | | 16, or if citizen parent served | 28. (NONE, if at time
12/24/52 | | honorably in U.S. Armed Forces: | of child's birth, citizen
| | (1) between 12/07/41 and 12/31/46 | parent was employed
| | (5 of the required years may | by a specified U.S.
| | have been after age 12); or (2) | organization. This
| | between 12/31/46 and 12/24/52, | exemption is not applicable
| | parent needed 10 years physical | if parent transmitted
| | presence, at least 5 of which | under *(1) or *(2) opposite.)
| | were after age 14. | Notes (1), (2), and (4). .
| Both are | One had resided in the U.S. or its | None.
| US citizens | outlying possessions. | .
On/after | Both are | One had resided in the U.S. or its | None.
12/24/52 | citizen | outlying possessions (3). | .
& prior to | One citizen | Citizen has been physically present in | None.
11/14/86 | one alien | US or outlying possessions 10 years, |
| parent. | at least 5 which are after age 14 (3). | .
On/after | Both are | One had resided in the U.S. or its | None.
11/14/86 | citizen | outlying possessions | .
| One citizen | Citizen has been physically present in | None.
| one alien | US or outlying possessions 5 years, |
| parent. | at least 2 which are after age 14 (3). | .
1. Absence of less than 60 days in the aggregate (total) will not break continuity of physical presence for this purpose. Honorable service in US armed forces counts as residence or physical presence.
2. No specific period of residence is required if alien parent naturalized before child reaches 18 years and child begins to reside permanently in U.S. prior to 18th birthday.
3. Physical presence abroad of dependent unmarried son or daughter as member of household of a person serving honorably in U.S. Armed Forces or employed by U.S. government or international organization may be counted as physical presence.
4. The retention requirement was repealed by Act of 10/10/78. Persons who had on 10/10/78 failed to retain are relieved from having to do so. Those who have previously lost citizenship by a failure to satisfy retention requirements of the Acts of 1934, 1940, and 1952 may not be reinstated.
CEN-TA Cross Border Services - Tax, Visas, Immigration