TN in MICHIGAN - Taxation of an Canadian resident with

This is a multi-part message in MIME format.
---------------------- multipart/alternative attachment
QUESTION:
How would you tax a Canadian resident with a TN visa working in Michigan?  We are based in the US.
-------------------------------------------------------------------------------------
david ingram replies:
1.    I would file a US 1040
2.    I would file a Michigan MI-1040 plus details of any of the 12 Michigan cities with a City tax 
3.    If I had a rental house in Canada, I would file a Canadian  tax return under section 216(4) and then convert the figures to US dollars and report them on my 1040 using Schedule E to report the rental and form 1116 to claim any foreign tax credit.
If I still had a Canadian RRSP, I would report the internal earnings and claim an exemption following the precepts set out in REV.PROC 2002-23 while I was waiting for the new form. from the IRS to be designed and printed.
If all my foreign accounts totaled over $10,000 US, I would make sure that I had filled in a form TDF-90-22 for each and every account.
http://www.irs.gov/pub/irs-fill/f9022-1.pdf  - Failure to fill these forms in can result in penalties of up to $500,000 plus 5 years in jail.
Extract from 2002-23 which is essentially the rule in spite of other bulletins issued until the new form comes out.
At any rate every US person must conform to REV.PROC 2002-23,  This means that (for each RRIF, RRSP, RPP) we must provide:
Section 4    Election Procedures
.01    In General
(i).    A Statement that the taxpayer is claiming the benefit of Article XVIII(7) of the US / Canada Income Tax Convention
(ii)    The name of the trustee of  the plan and the account number
(iii)   The balance of the plan at the beginning of the current year.
.02   Reporting
Beneficiaries shall attach a copy of the statement required in 4.01 until the tax year in which a final distribution is made.
.03    ROLLOVERS
If a rollover is made to a plan that does not attract Canadian Income Tax, and qualifies under Revenue Ruling 89-95, the previous election is deemed to carry over to the transferee plan.
.04    Transferee Plan Reporting
In the year of transfer, the beneficiary shall attach an additional statement
(i).    A Statement that the taxpayer is claiming the benefit of Article XVIII(7) of the US / Canada Income Tax Convention
(ii)    The name of the trustee of  the transferee plan and the account number
(iii)   The name of the trustee of  the transferor plan and the account number
(iv)   The total amount of income accrued in the transferor plan on which United States Income tax was deferred under Article XVIII(7) or former Article XXIX(5); and
(v)    The initial balance in the transferee plan.
Beneficiaries of a transfer plan shall attach a copy of the statement required in paragraph 4.02 (transferor plan)  and a copy of the statement required in this paragraph 4.04 (transferee plan) to their timely filed (including extensions) United States federal income tax return for each year subsequent to the transfer year until the tax year in which a final distribution is made from the transferee plan.
.05    MULTIPLE PLANS
An individual who is a beneficiary of more than one eligible plan must make a separate election and file a separate statement for each eligible plan.
.06    Extension of time for Making an Elections
An extension of time for making an election under paragraph 4.01 may be available under the procedures applicable under sections 301.9100-1 and 301.9100-3 of the Procedure and Administration regulations.
.07    PROSPECTIVE CHANGE OF ELECTION
An election once made cannot be revoked except with the consent of the Commissioner.
SECTION 5. DISTRIBUTIONS FROM AN ELIGIBLE PLAN
Distributions received by a beneficiary from an eligible plan shall be included in gross income by the beneficiary in the manner provided under section 72 of the Internal Revenue Code, subject to any other applicable provision of the Convention.
  --------------------------------------------
Answers to this and other similar  questions can be obtained free on Air every Sunday morning.
Starting this Sunday at 9:00 AM on 600AM in Vancouver, Fred Snyder of Cartier Partners and I will be hosting an INFOMERCIAL but LIVE talk show called "ITS YOUR MONEY"
Those outside of the Lower Mainland will be able to listen on the internet at
www.600AM.com 
==============================
This from ask an income tax immigration planning and bankruptcy expert consultant guru or preparer  from www.centa.com or www.jurock.com or www.featureweb.com. Canadian David Ingram deals daily with tax returns dealing with expatriate:
multi jurisdictional cross and trans border expatriate gambling refunds for the United States, Canada, Mexico, Great Britain, the United Kingdom, Kuwait, Dubai, Saudi Arabia, South Africa,  Thailand, Indonesia, Egypt, Antarctica,  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, American and Canadian and Mexican and any of the 43 states with state tax returns, etc.
income tax wizard wizzard guru advisor advisors experts  specialist specialists  consultants taxmen   taxman tax woman planner planning preparer of Alaska,  Alabama,  Arkansas,  Arizona, 
 California,  Colorado, Connecticut,  
Delaware, District of Columbia,  Florida, 
Garland, Georgia,  Hawaii,  Idaho,  Illinois,
  Indiana,  Iowa,  Kansas,  Kentucky, 
 Louisiana,  Maine,  Maryland,  
Massachusetts, Michigan, Minnesota,  
Mississippi,  Missouri,  Montana,  Nebraska,  
Nevada, New Hampshire,  New Jersey, 
New Mexico,New York, North Carolina,  
North Dakota,  Ohio,  Oklahoma,  Oregon. 
Paris,  Rome, Sydney, Australia Hilton
Pennsylvania,  Rhode Island,  Rockwall, 
South Carolina, South Dakota, Tennessee,  
Texas,  Utah, Vermont,  Virginia, 
West Virginia, Wisconsin, Wyoming, 
British Columbia, Alberta, Saskatchewan, 
Manitoba, Ontario, Quebec City, 
New Brunswick, Prince Edward Island, 
Nova Scotia, Newfoundland, Yukon and 
Northwest and Nunavit Territories,  
Mount Vernon, Eumenclaw, Coos Bay 
and Dallas Houston Rockwall Garland 
Texas  Taxman and Tax Guru  and wizzard 
wizard - David Ingram's US/Canada Services
US/Canada/Mexico Tax Immigration & working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver,  BC, CANADA, V7N 3L7
Calls accepted from 10 AM to 10 PM 7 days a week
Res (604) 980-3578 Cell (604) 657-8451
Bus (604) 980-0321 
[email protected]
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.   Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader & the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent financial, or real estate planner or advisor & appropriately qualified legal practitioner, tax or immigration specialist in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included."
---------------------- multipart/alternative attachment
An HTML attachment was scrubbed...
URL: http://www.centa.com/CEN-TAPEDE/centapede/attachments/0b7cb498/attachment.htm
---------------------- multipart/alternative attachment--

Trackback

Trackback URL for this entry: http://www.centa.com/trackback.php/UsCaWeekofMon20040329000971.html

No trackback comments for this entry.

0 comments