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Dear Centa Experts,
I am a Canadian citizen that has lived and worked in Arizona since September 1999. Upon leaving I closed all bank accounts, gave up car and furniture, etc. I transferred everything in my Altamira RRSP Mutual fund into their cash account. The only other thing I kept was a TD Visa credit
card in case I had to use it (no balance). I have been paying my taxes in the US since my arrival.
I am a co-founder of a Vancouver based privately owned company and came to the US to open a branch in Phoenix. Prior to the Phoenix office we had an office in New York and incorporated a US version of our company in Delaware. I was
paid a salary in US funds. I initially had an L1 visa and changed it after applied for a Green Card. I now have an Adjustment of Status for a Pending Green Card.
I have just sold my shares in the Canadian company and need tax advice. I want to know what my best options are to preserve as much of the money as possible. I am to receive the first 1/3 of the total amount in 12 monthly payments with the remainder being options for a further 18 months. The funds are in Canadian currency.
I am willing to consider moving back to Canada if that makes more financial sense, but my preference would be to stay in Arizona. We do not own a property in the US and have rented since our arrival.
I would like to pay for your advice if you feel you have the answer, if not I would greatly appreciate any referrals.
Thanks in advance,
SXXXXXXXX
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david ingram replies:
Your question is simply a mathematical calculation. I / We can help you do that.
There are other major considerations though.
1. Did you do a deemed dispostion calculation of your shares before you left Canada?
You should be able to answer that by looking at your 1999 departing Canada return.
2. Have you been reporting the internal earnings of your Canadian RRSP account to the IRS and the Satate of Californis?
3. Have you been reporting the existence of the RSP account to the department of the treasury in Detroit on form TDF-90.1-22? (fine up to $500,000 plus five years in jail for failure to file.) For details, see bottom of form at http://www.irs.gov/pub/irs-fill/f9022-1.pdf
4. Have you been reporting your ownership of the shares in the Canadian Corporation on Form 5471? .(fine up to $250,000 with minimum $10,000 for failure to file Fine is $10,000 for first 90 days and $10,000 every month thereafter to maximum of $250,000). For details see http://www.irs.gov/pub/irs-pdf/f5471.pdf
You will know by looking at your last two tax returns. If not, you could be being liable for very large fines. .
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