Canadian citizen, US Perm Resident, specific questions on USA taxes -

Subject: Canadian citizen, US Perm Resident, specific questions on USA
I came to US Sep 2005 on TN.  I have not yet filed US taxes for that
year or 2006.  I have Green Card as of Feb 2006.  In Canada I own one
RRSP (< $10,000 CND), one line of credit, student loans, and chequing
I filed the form so that revenue Canada deemed me non-resident as of
Sep 2005.  I also filed my Canadian 2005 taxes with departure date,
but no other forms like 1161, 1243 and 1244.  Received refund.
Now I am doing my US 2005 taxes and wish to use the "First Year
Choice" option, which I qualify for.  I do not need to fill out
TDF90-22.1, but will complete 8891 for my RRSP.
My questions are as follows:
1) Is there anything I need to declare to IRS or Treasury about
Canadian bank accounts, loans, credit lines etc?
2) I do not understand Foreign Tax Credit.  Can I claim the Canadian
tax I paid in 2005 for employment in Canada before my arrival in USA,
or can I only claim if Canada taxed me on income made in US? Using
form 1116.
3) Do I have to declare money earned within my RRSP for the 3 months
in 2005 to the IRS?  Even though it is locked in and I cannot realize
that money?  Or declare this only if I realize the money.
4) Should I have completed 1161, 1243 and 1244?  All I have is a small
locked-in RRSP, not cashed in.  No other property to dispose of.
Great forum!
david ingram replies:
Going from a TN to a Green card in less than six months is an amazing feat which makes me think you are married to an American in which case the question of a joint return arises.
1.	You need to declare any Canadian accounts to the US treasury on form TDF 90-22.1 if the total of all accounts is over $10,000 US. I am betting that your RRSP is more than $10,000 US so any other Canadian account must be reported.  This would include an account that you might have signing authority over with your mother, father, brother, sister or child, etc., even though you do not have any ownership of the funds.  The TDF form shows where the relevant info goes.
2.	In the case described, there should be no foreign tax credit to the US since you will not be declaring any Canadian Income or tax paid on the US return if you file a Dual Status return as an arriving resident.  However, it is possible if you are married and filing a joint return,  that it might be better to report the Canadian income and claim the foreign tax credit because that allows you to use a standard deduction.
3.	The 8891 requires you to report any increase in value in your RRSP(s) from the day you  moved to the US until Dec 31st of each year.
4.	If you did not have any assets other than an RRSP, an 1161 is not necessary. The 1243 and 1244 are only prompted by a T1161 and will not be necessary either.
Good luck on your preparation.  Few professional tax preparers can do your return.
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