Moving back to Canada - Expatriation return - 1040C -

QUESTION:
Hi, I have 2 questions (we have lived in US, with a Green Card, for 6 years
and intend to move back to Canada for our retirement):
1) Do you see an advantage in rolling over an IRA to an existing  RRSP?
2) Is there a difference, tax wise, if we sell our house before or after
leaving the US?
Thank you
==================
david ingram replies:
This is an old question but has been saved for a time when I could answer
it.
You can NOT directly roll an IRA over to an RRSP.  It is a "sort of" silly
process and I suggest that you leave your money in the USA.
For all practical purposes, it can matter a lot if you get caught in the
expatriation rules.  The expatriation rules apply in the US when a citizen
gives up their citizenship or a green card holder gives up their green card
to avoid having to file US tax returns.  The rules were changed in June 2004
and can become very punitive and can treat a former resident as a US
resident for tax purposes when they return to the US for as little as thirty
days. The old rules had a threshold  when the taxpayer's income was an
average of $124,000 over the five years before departure OR their net worth
was at least $622,000 at departure.  In the old rules, if you had possessed
your green card for 8 out  of the prior 15 years you were liable for US AMT
(alternative minimum taxes) on your world income for ten years after
expatriation.
go up in value after you cross the border.
The new rules must be looked at by anyone contemplating giving up green
cards voluntarily.
Better to sell it before you leave.
If you sell it before you leave, you will be tax free with the house in the
USA if you sell it within three years and have lived in it for 2 out of the
last five years before sale.  You will have to report it on your 1040
Schedule D as sold and show the profit and then - provided the profit is
less than $250,000 for each owner, you will exempt it on schedule D under
Section 121 of the IRS code.
If you keep the house, Canada will want to tax you on any increased value
after you cross the border if you buy another house in Canada because Canada
does not allow two houses tax free at the same time.
And, if you keep the house and give up your green cards, you will be a
non-resident alien and the US will want Alternative minimum tax on its sale
later on.
Remember that when departing the US, you need to file form 1040C BEFORE you
leave.
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  host a 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 <http://www.600am.com/>
Local calls are taken at (604) 280-0600 and Long Distance calls (BC only)
are taken at 1( 866) 778-0600
Callers to the show are invited to attend free seminars on financial
planning with such specialities as deductible mortgage interest. They are
held at Fred Snyder's Office at 1764 West 7th in Vancouver - (604) 731-8900
for more information.
=========================================
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 <mailto:taxman at centa.com>
www.centa.com <http://www.centa.com>  www.david-ingram.com
<http://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 <http://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
<http://www.centa.com/>  or www.jurock.com <http://www.jurock.com/>  or
www.featureweb.com <http://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 Nunavut 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
============================
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 Nunavut 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
============================
--
No virus found in this outgoing message.
Checked by AVG Anti-Virus.
Version: 7.0.323 / Virus Database: 267.6.2 - Release Date: 6/4/05
--
No virus found in this outgoing message.
Checked by AVG Anti-Virus.
Version: 7.0.323 / Virus Database: 267.6.2 - Release Date: 6/4/05

Trackback

Trackback URL for this entry: http://www.centa.com/trackback.php/UsCaWeekofMon20050530001857.html

No trackback comments for this entry.

0 comments