Canadians who worked in the US have 401(K) plans -

My_question_is: Applicable to both US and Canada
Subject:        Canadians who worked in the US - investment/mortgage advice
Expert:         taxman at
Date:           Tuesday September 07, 2004
Time:           10:50 AM -0700
My husband and I are Canadian citizens who have worked in the US for ~5 years, contributing to the 401K plan through our company, as well as purchasing some US stocks on our own.  We are now back in Canada and would like to buy a home next year.  Would you recommend that we cash out our 401K or stocks to help with a mortgage downpayment or keep it all in the US until we plan to retire?  We also have very little income this year (we took some time off to travel), so we thought the tax penalty of cashing our 401K this year would be lower ...
Thank you for your advice!
david ingram replies:
Cashing in $10,000 US to use to buy a home is a good use of the money and does not incur the 10% early withdrawal penalty.  In fact, if you both have a plan, you can cash in $10,000 US each.
If you have low income this year. (less than $20,000 each US), you are correct.  It is a good time to cash in some of the 401 (K) money and pay down as much of the Canadian Mortgage as possible even if you have to pay a couple of thousand penalty on the extra $20,000.  You more you can reduce the Canadian mortgage, the better.  Taking the money out at a low tax rate and paying the 10% penalty will almost certainly still be lower tax than taking it out later on..
ALL OF the free stock should be sold and the money used to reduce the Canadian Mortgage.  If you want to buy back the stock, use the increased equity in your house to make a loan and use the loan proceeds to buy your stock and the interest is deductible.
Goto and read the November 2001 Newsletter (top box on left hand side) and get more ideas about how to make a Canadian mortgage tax deductible.
Answers to this and other similar  questions can be obtained free on Air every Sunday morning.
Every 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 
Local phone calls to (604) 280-0600 - Long distance calls to 1-866-778-0600. 
Old shows are archived at the site.
This from ask an income tax immigration planning and bankruptcy expert consultant guru or preparer  from or or 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 Denver  Colorado, Connecticut,  
Delaware District of Columbia Miami  Florida, 
Garland Georgia,  Honolulu Hawaii,  Idaho,  Illinois,
 Indiana Des Moines Iowa  Kansas  Kentucky, 
 Louisiana  Bangor Maine  Maryland  Boston, 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 (Personal residence by appointment only please)
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 Fax (604) 980- 0325
davidingram at
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
-------------- next part --------------
An HTML attachment was scrubbed...


Trackback URL for this entry:

No trackback comments for this entry.