TN visa holder in Maryland - T1161 T1243 T1244


Hello, I am a TN1 visa holder and moved to Maryland July 1st 2004. I worked
part time in Canada Jan 1st-June 28th 2004. I am mariied and my wife lives
with me full time. She is a full time student through correspondence at a
Canadian university. I have RSP's and other stock invesments,(no real estate)
in Canada. I only have one bank account in Canada and one Canadian Credit
card which have both been 99% inactive since I moved. What should I do for
tax purposes in Canada and how should I be taxed here in the US? Should I
close out my bank account and visa? Thank you.
-----Original Message-----
From: David Ingram at home - bus at [email protected]
[mailto:[email protected]]
Sent: Wednesday, March 31, 2004 9:02 AM
Cc: TAXMAN; david ingram at home
Subject: TD F-90 T1243 T1244 T1161 South Carolina from Ontario

Sorry, David,

I missed your reply! I thought this was just the same thing we had sent
you. Thank you very much for the information and for the list of contacts
as well. If you feel comfortable with your knowledge in this area, we will
likely go with you. Could you give us a rough idea how much it would cost
for you to do it: The combined Canada, S.C. and N.C. return?

Also, as we are on a TN. and (ultimately) I will be on a student visa with
RRSP's in Canada do you think its worth pursuing non-resident status?

Thanks again

david ingram replies:

Assuming that you want to escape Canadian Income tax, you will file a
Canadian T1 as a departing Canadian. This will require the filing of form
T1161 and possibly T1243 and T1244 if there is tax involved on your deemed

Because you only worked part-time, I am assum ing that your income for the
first six months was not too high. Therefore, I would file your US return
on your world income for the year which would include the Canadian income
for the first six months. This would give you the right to file a US joint
tax return and would result in lower US taxes.

The RRSP and stock accounts will also require some special reporting and I
am going to include prior answers at this point to save on the amount of
writing I have to do.

Hope this helps and of course I would be happy to look after your returns by
snail mail, email, fax or courier.

You would be looking at $700 to $1,400 Cdn for the three returns. I realize
it is a big spread but departing Canada returns require a T1161 and possibly
a T1243 and T1244.

This is the form to calculate the tax on the T1161

This is the form that defers tax on the deemed disposition

Pro-rated exemptions, etc.

Take a look at the forms.

Your Canadian Accounts require TD F-90 forms and your RRSP's require special
reporting as well. We would start by filing an extension for the US return -
form 4868. if this fillable form does not

By non-resident status, I think you are referring to the USA. That would
be the last thing you would want because non-residents can NOT file a joint
return. The US joint return will save you thousands.

The first year is a toss-up. Most people would file you as a dual status
which also means no joint return. The only way to do it is both ways. To
file the joint return in the USA the first year, we have to add in all your
Canadian Income as well and claim a foreign tax credit. This almost always
results in significant US tax savings.

-----Original Message-----
From: David Ingram at home - bus at [email protected]
[mailto:[email protected]]
Sent: March 31, 2004 11:19 AM

Subject: South Carolina after moving from Ontario - - Gary Gauvin from
Rockwall and Garland Texas - ask an income tax expert experts specialist

----- Original Message -----
To: 'David Ingram at home - bus at [email protected]'
Sent: Tuesday, March 30, 2004 6:34 PM
Subject: RE: Question misdirected

Thanks David,

Here it is again:
I just found your site yesterday and I'm excited at the resources you
provide. Generally we are do it yourselfer tax folks, but I think we may
need your services which we can discuss later as it is pretty complex.
Perhaps you could clarify something for us.

We live in Ontario and we are in the process of selling our house. We have
bought a house in South Carolina which will close in June. My wife is going
to go in on a TN visa as a Physiotherapist and I will go in as her spouse.
Later (in August) I will register with a student visa, so that I do not have
to renew it annually like my wife will. Now my wife will actually be working
in North Carolina as a physiotherapist and we will live (and I will go to
school) in South Carolina.

What are the tax implications of:

A) buying a house in the USA (S.C.) and then selling it after 3-4 years to
return to Canada.

B) working in one state (N.C.) and living in another?

Thanks in advance for considering our situation,



david ingram replies;

If you buy a South Carolina, North Carolina. Arkansas or Georgia House and
live in it, any gains will be tax free up to $500,000 ($250,000 each) if you
have lived in it for 24 months out of the last 60 that you owned it.

If you lived in Hull, Quebec and worked in downtown Ottawa, you would file a
Quebec and a Canadian Federal return.

If you live in North Carolina and commute to South Carolina, you will be
filing a South and North Carolina return. You will not pay double state
taxes but you will end up paying the higher rate after exemptions, credits,
deductions, etc.

In your first year in the USA, you have the option of filing a joint tax
return by reporting your Canadian Income as well. This will save you tax.
Most preparers will suggest that you have to file a dual status return the
first year and can make it a joint return.

Whatever you do, have this year's returns prepared by someone who does both
(with experience - not at your learning expense).

There are a lot of us around although we are hard to find. There is a Steve
(don't know his last name because I misplaced it so this is an appeal for
the fellow who gave it to me to resend it) in Halifax and Gary Gauvin.


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