Canadian resident with estate coming from the USA - Canadian-US-Global Income tax help - david ingram expert US CANADA cross bo


I am an American and Canadian citizen.  My last surviving parent in Portland, Oregon has passed away.

I have been submitting American tax forms for the 20+ years I've been living in Vancouver, Canada. 
My income has never exceeded the exemption so I've never had to pay any tax in the US.

My parents have a trust in Portland and a home and contents.  My sister and I are the recipients of the estate 50%50%.

Would your firm be able to assist in advising me?


david ingram replies

What you are looking for is what we do.  I have actually been sitting at the same desk in this house for 40 years and 3 days and at the same desk for about 45 years doing US / Canadian Income Tax Returns.

If you have been doing your own returns, I trust that you have been filling in your TDF 90-22.1 forms to report your Canadian Financial Accounts to the US Treasury (see question 7 on schedule B which has a $10,000 penalty for not answering yes OR no) And that you have been filing form 3520 or the preferred 8891 as required if you have a Foreign Trust (an RRSP) as asked about in question 8).

If you have not been filing these forms, it is easy at this time to make a voluntary disclosure and catch up the next 6 years without penalty.  If you have been filing these, good going.

You can call (604) 980-0321 M to Friday from about 10:10 AM to 3:30 PM to make an appointment by phone or in person.

Read the following to see what I mean about the foreign account reporting rules. People do not always 'hear' what they are told. <grin>


This kept being rejected by when I sent it
from my account , so I asked a
friend to send it from his account.  

Here it is:

Yes, the general requirements for a person to use
Schedule B are listed at the top of the instructions,
but, as with most tax rules, there are exceptions.
This exception is shown at the BOTTOM of the
instruction page
( below the
final TIP box) and it says to answer NO to the
question of whether the filer has a foreign bank
account if "the combined value of the accounts was
$10,000 or less during the whole year."
I think what you have written is that, in effect, a
person who has only $10 in a Canadian bank would have
to file Form B and answer yes to question 7a, but that
is contrary to the IRS instructions. 
The H&R Block "Tax Cut" program does not select
Schedule B or check the YES box unless the $10,000
threshold is reached. (I tried it out to see, by
answering YES to foreign account, but NO to $10,000 or
Doing a Google search on "SCHEDULE B" "FOREIGN
ACCOUNT" "7a", I find many articles stating that 7a
only applies to accounts of $10,000 or more.
"Line 7a is straightforward. Basically, if you had a
foreign account, check "Yes" here. Even if you did
have such an account, the IRS says you can check "No"
if the average balance in the account was less than
$10,000 during the whole year."

...the answer to question 7a only applies where the total of all foreign accounts exceeds $10,000 at any time in the taxable year." Do you still say that ALL persons who have to file U.S. taxes and have a Canadian account have to file Schedule B and check YES to question 7a? Regards, Fxxxxxxx -------------------------------------------------------------------------------- david ingram replies:

I challenge you to show me where I said that a person with 'any' foreign account had to check off yes to question 7a.  You only have to say yes to 7(a) if the combined totals of all foreign financial accounts was over $10,000 US at ANY ONE TIME in 2007.  Because of the change in the exchange rate in 2007, if you had $9,500 Canadian in the account at the end of 2007 when the rate was 1.10 Cdn to a US dollar, you would have to say yes. even if the rate dropped back to 99 cents.

What I said and still say is that you have to file Schedule B if you have a foreign account whether it is in England, Spain, Iraq or Switzerland.   In other words, if you have foreign accounts and they were always less than a total of $10,000 US in 2007, you have to answer "NO" to question 7a on Schedule B but YOU HAVE TO FILE SCHEDULE B..

Of course, if you have $10.00, 100, 1,000, 10,000 or 100,000 in an RRSP, you have to answer "yes" to question 8 and fill in the 8891. 
And, if you had $10,000 in an RRSP, you would also be answering yes to 7(a).

And, if you are the contributor to a child's RESP, that adds to the amount for $10,000 and requires the filing of a 3520 because RESP accounts are NOT covered by the form 8891.

If you did not have 'any' other accounts but had put $1,000 into a grandson's RESP which you were the signing authority over, you would check NO to question 7a, leave 7b blank and say yes to question 8 and then fill in form 3520.

Your own question answers your own question. 

The top says file the form if you have a foreign account or were the grantor of a foreign trust - the bottom says answer no if the total is less than  $10,000.  Tell me where it says you do not have to file the form if the answer is 'no'.  You have missed the point that the IRS WANT S the 'no' answer in writing IF you have a foreign account.  I was also told by the Treasury rep that there is a  penalty for not filing Schedule B if you have a foreign account.  that penalty is $10,000 but i have never seen it enforced.  I have seen the $10,000 to $500,000 penalty for not filing a required TDF 90-22.1 imposed over 1,070 times now.  My favourite was the 105 year old lady in a Lynn Valley Nursing Home who was fined $10,000 for not reporting an Edgemont Village Royal bank Account.

For those who don't have schedule B handy, you can find it at:


The older bit is here.

Date: Mon, 11 Feb 2008 00:44:49 -0800
From: [email protected]
Subject: Schedule B if you have a foreign account
To: fxxxxxxxxxxxxxxx

XXXXXXX wrote: 

[email protected]>

In case you find this amongst the spam, I have a
comment about reporting interest on Schedule B. 
You state: 

"AND, they also made the point that everyone with
foreign accounts MUST file schedule B, even if there
is no earnings form the accounts."

But...the Schedule B instructions state that it is not
necessary to answer YES on Schedule B if an account is
less than $10,000.  So, when you tell people to file
Schedule B, shouldn't you add "if any of your accounts
have been worth at least $10,000 anytime during the
Schedule B, part III instructions are here: 

david ingram replies:

The instructions for who must file a Schedule B (top
right hand side of page B-1) that you sent clearly
state that Schedule B must be filed if you have a
foreign account.

• You had over $1,500 of taxable interest.
• Any of the Special Rules listed in the instructions
for line 1 apply to you.
• You are claiming the exclusion of interest from
series EE or I U.S. savings bonds issued after 1989.
• You had over $1,500 of ordinary dividends. 
• You received ordinary dividends as a nominee.
• You had a foreign account or you received a
distribution from, or were a grantor of, or transferor
to, a foreign trust.
Part III of the schedule has questions about foreign accounts and trusts. -

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.

Most Wednesday evenings, from 6 to 7 PM Vancouver (Pacific - LA, Seattle) time, I interview others and answer US Canada, Great Britain, Spain, Indonesia,  Mexico, etc.  Tax and immigration questions.  GOTO - the North American phone number is (866) 980-0499 - the local number in the lower mainland is (604) 980-0321.-


You might try calling Fred Snyder's weekly radio program 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 every Sunday - call 604-280-0650 or 1-877-280-0650  LISTEN LIVE IN SAUDI ARABIA AT WWW.AM650RADIO.COM (hit button in top left hand corner).

I guest on the show on the First Sunday of each month.   Jan 3, Feb 7, Mar 7, Apr 4, May 2, June 6, 2010.


Trackback URL for this entry:

No trackback comments for this entry.