I currently have a Canadian RRSP account that I would like to transfer
to the US. I was transferred by my company to California, and at that
time I had the option to move the RRSP at a withholding rate of 25%.
It has been almost 5 years now, and I would like to move the money to
the US and invest it.
What is the process, and what are my taxation concerns in both
countries. Is there a benefit to leaving it or moving it? Is there a
max or minimum amount to move?
Thank you.
------------------------------------------
david ingram replies:
When you cash in a Canadian RRSP as a non-resident the Canadian
Withholding is a flat 25%. You do not have to file a Canadian Tax
return although if you were only cashing in $10,000 and had no other
income that year, you could file a Section 217 Canadian return and get
some of the tax back.
For US purposes, you have to look at the value of the RRSP the day you
left Canada. Only the gain from when you left to when you cash it,
is taxable in the USA.
So if you cashed in $100,000 and had $25,000 withheld and it was worth
$90,000 the day you moved to the USA, your earnings would be $10,000
and the tax withheld would be $2,500. You would then report the
$10,000 (converted to US dollars) on Schedule B (assuming interest or
dividends) and Schedule D if it was a capital gain. The $2,500
(converted to US dollars) would be claimed as a foreign tax credit.
Should you move?? What a question? If you do NOT have a use for the
money, I would leave it in Canada. You said you have been gone five
years. If you had taken it out of Canada in March 2000 and were
looking at its worth today, you would likely have a heart attack
because on average you would have lost 30% in exchange and the US
market has not performed at all well in relation to Canada. My bet is
that you have 50% more for having left it in Canada.
>From your email address and the fact that we looked after your return
last year, I know that "YOU" understand all to well what has happened
to Canadian Exports to the USA because of the drop in value of the
American Greenback.
I am one of the people who feels that the Canadian dollar will
continue to rise (to our detriment with regard to International trade)
and come close to par again. But if I am wrong and the American
Market takes off, you will shoot me.
So play it by ear. Take half to the US and leave half in Canada. That
hedges your bet.
I also recommend, (if he will accept a new account) that you move
your account to a fellow I have never met named Shaun Rickerby, a
broker with TD Investments in Richmond. Shaun is one of about 16
people in all of Canada who has made the effort to be licenced to deal
with Canadians in about 43 states.
You can get hold of Shaun at shaun.rickerby at td.com his phone number
is 604 482-5188
Hope this helps. I will be glad to look after your returns as you
know.
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 Dundee
Wealth Management and I, David Ingram 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
Local calls are taken at (604) 280-0600 and Long Distance calls are
taken at 1( 866) 778-0600
I do not know how far the LD line reaches.
=========================================
David Ingram's US/Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Res (604) 980-3578 Cell (604) 657-8451
(604) 980-0321 Fax (604) 980-0325
Email to taxman at centa.com
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
and the author and any and all non-contractual duties are expressly
denied. All readers should obtain formal advice from a competent and
appropriately qualified legal practitioner or tax specialist in
connection with personal or business affairs such as at www.centa.com.
If you forward this message, this disclaimer must be included."
Be ALERT, the world needs more "lerts"
==============================
This from "ask an income tax and immigration expert" from
www.centa.com or www.jurock.com or www.featureweb.com. David Ingram
deals on a daily basis with expatriate tax returns with:
multi jurisdictional cross and trans border expatriate problems for
the United States, Canada, Mexico, Great Britain, the United Kingdom,
Kuwait, Dubai, Saudi Arabia, Thailand, Indonesia, 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, and any of the 43
states with state tax returns, etc. Rockwall, Dallas, San Antonio and
Houston Texas
Denmark, Finland, Sweden Norway Bulgaria Croatia Income Tax and
Immigration Tips, Income Tax and ImmigrationWizard Income Tax and
Immigration Guru Income Tax and Immigration Consultant Income Tax and
Immigration Specialist Section 216(4) 216(1) NR6 NR-6 NR 6
Non-Resident Real Estate tax specialist expert preparer consultant
expatriate anti money laundering money seasoning FINTRAC E677 E667
4789 4790 TDF-90 Reporting $10,000 cross border transactions
=========================
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.
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 - consultant - expert - advisor -advisors consultants - gurus -
Paris Prague Moscow Berlin
Lima Rio de Janeiro, Santaigo
============================
New York, Boston, Sacramento, Minneapolis, Salem, Wheeling,
Philadelphia, Pittsburgh, Atlanta, Pensacola, Miami, St Petersburg,
Naples, Fort Myers, Cape Coral, Orlando, Atlanta, Arlington,
Washington, Hudson, Green Bay, Minot, Portland, Seattle, St John, St
John's, Fredericton, Quebec, Moncton, Truro, Atlanta, Charleston, San
Francisco, Los Angeles, San Diego, Sacramento, Taos, Grand Canyon,
Reno, Las Vegas, Phoenix, Sun City, Tulsa, Monteray, Carmel,
Morgantown, Bemidji, Sandpointe, Pocatello, Bellingham, Custer, Grand
Forks, Lead, Rapid City, Mitchell, Kansas City, Lawrence, Houston,
Albany, Framingham, Cambridge, London, Paris, Prince George, Prince
Rupert, Whitehorse, Anchorage, Fairbanks, Frankfurt, The Hague,
Lisbon, Madrid, Atlanta, Myrtle Beach, Key West, Cape Coral, Fort
Meyers, Berlin, Warsaw, Auckland, Wellington, Honolulu, Maui,
Kuwait, Molokai, Beijing, Shanghai, Tokyo, Manilla, Kent, Winnipeg,
Saskatoon, Regina, Red Deer, Olds, Medicine Hat, Lethbridge, Moose
Jaw, Brandon, Portage La Prairie, Davidson, Craik, Edmonton, Calgary,
Victoria, Vancouver, Burnaby, Surrey, Edinburgh, Dublin, Belfast,
Glasgow, Copenhagen, Oslo, Munich, Sydney, Nanaimo, Brisbane,
Melbourne, Darwin, Perth, Athens, Rome, Berne, Zurich, Kyoto, Nanking,
Rio De Janeiro, Brasilia, Colombo, Buenos Aries, Squamish, Churchill,
Lima, Santiago, Abbotsford, Cologne, Yorkshire, Hope, Penticton,
Kelowna, Vernon, Fort MacLeod, Deer Lodge, Springfield, St Louis,
Centralia, Bradford, Stratford on Avon, Niagara Falls, Atlin, Fort
Nelson, Fort St James, Red Deer, Drumheller, Fortune, Red Bank,
Marystown, Cape Spears, Truro, Charlottetown, Summerside, Niagara
Falls, Albany
--
No virus found in this outgoing message.
Checked by AVG Anti-Virus.
Version: 7.0.300 / Virus Database: 265.8.0 - Release Date: 1/27/05
-------------- next part --------------
An HTML attachment was scrubbed...
URL: http://www.centa.com/CEN-TAPEDE/centapede/attachments/20050128/63ea236d/attachment.htm
What's Related