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PART IV Canadian retire in US - Medical Costs

K wrote David like most people who have moved from Canada to the US - I find the health care costs amazing. $400 a month for myself and my son. No coverage for the first 6 months of pre-existing (fairly minor) conditions. Copays for EVERYTHING - doctors, prescriptions, lab tests. First $4000 of anything outside of a doctor's office is MY cost per year - so until I've reached 4K I pay for all tests, x-rays etc.
Not to mention that in many places you can't find a specialist as they have quit due to the extensive litigation in the US. For the THIRD time in less than a year I have to find another doctor as each of them have closed their practices.   As to not waiting in the ER come to California. Read about the waits in the ER here. Read about people calling 911 FROM an ER in Los Angeles.  --------------------------------- AND

F wrote

My dad living in Toronto could not visit me in Wisconsin for the last 5 years of his 90 years of life, OHIP only covered him for something like $50 per day outside \Canada, and he could not get private insurance to cover pre-existing conditions which was of course exactly where he was likely to need medical care.   If someone can actually get into the USA as a resident, then the states usually have an assigned coverage requirement where insurance companies are required to cover people who cannot otherwise get private coverage and do not qualify for medicare, on a rotational basis.  Wisconsin does anyway.  It's fairly expensive, but it is somewhat limited.  ------------------------------------------------ david ingram replies:

The original question involved taking a Canadian father to the US to live with a green Card holder.  I replied that it was not likely and too expensive, etc.  A client wrote back with his suggestion that it was okay with him and I published his reply out of fairness to my audience.  OOPS!

I have some 125 negative comment replies like the two above and I will bet that only 40% of the 13,000 people that get this will have read it yet.

I promise, this is the last email on this part of the subject but if you have a pro or con comment to make, I would like it for my own research. I just do not intend to publish any more at this time.

I am also sending it to my US list for the first time so that they can see what has happened on the US Canada and Canada lists.
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Capital gains tax when moving because of neighbourhood


We moved 9 months ago and have just found out that townhouses are going to be built behind us, as of May 2008. We do not want townhouses looking into our backyard. When we bought the house in Feruary, we were not aware that builders were going to tear down the existing house and barn to build townhouses. We would like to stay in the same neighbourhood (maybe across the street or across and down).  Either way, will we have to pay capital gain if we were to move again soon?

david ingram replies:

If you are moving because of an outside irritant you were unaware of when you bought, any capital gain would be tax free.  If it is the third time in three or four years you may / will have to justify it to the CRA becasue they will assume you are a flipper. �
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US CANADA PART III - Canadian retire in US - Medical Costs

H wrote
The current responder fails to include several caveats:
1. The premium does not cover all costs. There are deductibles
and copays that can total up to $2000 per year "out of pocket"
2. The premium rates could escalate substantially year over year
depending on the plan actuarial losses
3. Many individuals may have difficulty obtaining health insurance
at all depending on preexisting conditions or they may be subject
to substantial surcharges depending on the nature of the condition.

In other words it is not as simple as it looks as some people would
lead you to believe. However, for those that can afford it, the accessibility
to care and technology is probably better down here and when someone
needs urgent admission to hospital they don't have to lie around the E.R. for 2 days.

david ingram replies:

Thank you for the insite because i know you are "there", living in the US. The writer below was making it look easy but the other letters I have received all seem to agree tih me or at least want to warn the previous writer.

When buying private US medical, pre-existing conditions are usually not covered or are rated so high that the insurance cost IS prohibitive.  Using myself as an example, a previous congestive heart failure diagnosis would likely mean that i would not be accepted for insurance.   

I have just hung up from talking to a medical doctor (from Winnipeg) who moved to Virginia.  Their meidcal insurance for a three person family is $1,800 per month with significant co-pays. and a cap of $1,000,000

Beware if you are going to move an older parent to the US to live with you. �
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Canadian retire in US - Medical Costs

XXX wrote:
David, I don't quite understand why you often say -- as you do below -- that "medical costs [in the U.S.] make it impossible."  We just happen to be considering bringing my 87 year old mother down from Canada to live in an expanded portion of our home in Bellingham.  She would sell her home in B.C. and part of the proceeds would go to covering the cost of the self contained suite we would build on to our house.  Maybe I am missing something in the warning you are giving everyone, but I have to tell you that even the very best medical plan Group Health, for example, offers is far from "impossible" at $564.00 a month for a non-smoker 65 and older, not eligible for Medicare.  Compared to B.C., yes, that's expensive.  But so what if she lives with us and her CPP and OAP go to cover it!

I will be 62 this week and continue to commute each day to my workplace in Surrey, B.C.  I readily admit that if I had to pay such a premium, it would be difficult -- particularly were I younger with many more years to go before I had Medicare at 65.  I currently pay about $100.00 a month for a great medical plan from Group Health.  Of course, it is through my wife on her plan at work.  I also have a dental plan in the same way.  It is just as good as the one I had through a former employer when I lived in B.C.

As someone whose taxes you prepare for me each year, you will recall that I am a Canadian citizen who emigrated here on a fiance[e] visa in 2004 ro marry my American citizen wife.  I am pleased to tell you now that on August 15th of this year I was sworn in as a U.S. citizen!  So now, of course, I am one of those fortunates who have dual citizenship.
On Oct 3, 2007, at 12:08 AM, US / Canada Income Tax Help - CEN-TAPEDE wrote: ----------------------------------------------------------------------------------------
david ingram replies:

I have to admit that you make a new point.  Of course, TODAY, at the moment I write this, the Canadian Dollar is actually MORE than the US dollar.  Youir Canadian salary has gone up over 40% in US spending since you moved to the US.  However, if we were talking about taking mom to the US when you moved down in 2003 and the US dollar was 1.401, that $564 would be about $790 Caandian and a year earlier, it would have been $885.00 

We had hundreds of people (remember i am only one person) returning to Canada because they  could not afford it anymore from 98 to 2004.

It has slowed down dramatically and maybe a rethink is in order.

In fact, I have one (only one) daugher looking for a home for her mother in Bellingham because it would be cheaper than what she is paying In Canada.  This is the reverse with a mother who was brought up to live with daughter in Canada when the US dollar was large and Canadian expenses were really cheaper in relation.

Thanks for the insight.


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Canadian retire in US


Both My wife and I am green card holder and currently working in US. We would like to ask my Father (Canadian Citizen) to come to live with us. He is above 65, would he be able to qualify for any Medicare plan? would private Health care be an option?


david ingram replies:

Since I am now 65, that does not seem that old any more but I have to tell you that you are asking for the impossible.  The medical costs will make it impossible even if you could do it.  You can take out US citizenship and sponsor your father but I doubt if it would work out for you financially.

If you have a real problem, get your US citizenship so that you can come and go for long periods (if necesasary) from Canada without any problems. (i.e. if necessary, you opr your wife can come to Canda for a year or two without a problemm if a US/Canada dual citizen).

Another partial solution is to move to some place like Bellingham (means changing jobs) and have dad live in White Rock officially and visit you a lot in the US.  Even then, over 80, even medical trip insurance will become prohibitive.

Niagara Falls New York and Niagara Falls Canada work as well but the winters are less friendly.

Sorry I do not have a better answer.  Every week, I have someone moving back to Caanda because of the US medical system which is just not as good for the average person as the Canadian system.
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Registering children on title of parent's home


  I appreciate all I learn reading your emails.   Mom is still thriving in her 87th year. My brother and I are executors.   Is there any significant advantage in us being registered on the title of her condo here in British Columbia?   I had forwarded the following email to my brother, but since B.C. does not have estate taxes, he is asking where the advantage might be...   ------------------------------------------------------------------------------------------------
david ingram replies:

BC does have Probate fees though and avoiding probate fees can be worth significant dollars
The BC rates are as follows:

2  (1)  In addition to any fees payable under the Rules of Court to commence a proceeding to obtain the issue of a grant or a resealing and to any fees payable under the Rules of Court to file documents within that proceeding, a fee determined in accordance with this section must be paid to the government, before the issue of any grant or before any resealing, as the case may be, on behalf of the estate of a deceased by the personal representative of the deceased but is payable by that personal representative in his, her or its representative capacity only.

(2)  No fee is payable under this Act

(a) on a grant de bonis non, a cessate grant or a double probate, or

(b) if the value of the estate does not exceed $25 000.

(3)  If the value of the estate exceeds $25 000, whether disclosed to the court before or after the issue of the grant or before or after the resealing, as the case may be, the amount of fee payable is

(a) $6 for every $1 000 or part of $1 000 by which the value of the estate exceeds $25 000 but is not more than $50 000, plus

(b) $14 for every $1 000 or part of $1 000 by which the value of the estate exceeds $50 000.

(4)  If, after the issue of any grant or after any resealing, the personal representative learns of the existence of an asset of the deceased that was not disclosed in the Statement of Assets, Liabilities and Distribution exhibited to the affidavit leading to the grant or to the resealing, determines that the value attributed to an asset in that statement must be revised or determines that an asset was otherwise not properly disclosed, the personal representative must disclose to the court the existence and value of that asset and must pay to the government the difference between the fee paid before the issue of the grant or before the resealing and any greater fee that would have been payable under subsections (1) to (3) had the asset been disclosed or appropriately valued in the original Statement of Assets, Liabilities and Distribution.

If her house was the only thing in the estate and worth $650,000 the probate fees in BC would be worth $8.550.  If the house was in joint tenancy with right of survivorship, there would be no probate fees and no need to go to the time and effort of probateing the will.

If the house is $1,050,000, you save $14,050.00

The big savings is in the paperwork after death.  Most of it goes away if you do not need to probate a will.

The rules are similar  for most provinces and states and there is no US Federal Estate tax now on amounts under $2,000,000 for 2007 and 2008 and $3,500,000 for 2009.  Individual states do have estate tax however but the rates change from state to state.  You can see the Ohio taxes (as an example) at

Because the family house falls into a taxable estate, the joint tenancy rule in Canada does not work the same in the USAwhen there is a taxable estate but can still save a lot of paperwork.

The original Q & A follows

My question is: Canadian-specific

QUESTION: I am an only child. My elderly parents own a home which will some
day come to me. Is there a tax advantage to having the home put in all three
of our names now and as any one of us passes on the house is already in the
survivors names. If yes what is the process to get this done.

david ingram replies:

If you put the home into joint tenancy with right of survivorship, the home
does not pass through probate upon any of the member's death.  With the
value of some homes today, that can be a significant saving in probate fees
in some provinces and states.

However, after the transfer form mom and dad as "joint tenants with right of
survivorship" to mom, dad and you as  "joint tenants with right of
survivorship", the property is bound to go up in value and theoretically, if
it is "yours", you would owe capital gains tax on your share when eventually

The solution is to have a side agreement which states that your name is on
title for estate and probate purposes and that you are holding what ever
share (there could be three or four kids along with mom and dad) you have in
trust for them and that you will not pledge it as security, will not list it
as an asset and will not make any effort to partition the property and have
it registered as tenants in common.

Many lawyers are not happy with this arrangement but I have seen it done
many, many times and never challenged by the CRA or IRS.  
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investment question re severance pay

Hello David,
I just received a severance payment. What would be the best way to invest this money without incurring so much tax from the government. I have so much room for my RRSP. I am thinking of dumping it to my RRSP and just claiming my contribution every tax year. What do you think. Thanks for your advise.
david ingram replies:

Using an RRSP deduction is the easiest and safest way to cut down income tax and spread it out.

However, a better use might be to pay the tax and pay down a non-deductible mortgage or pay the tax and use the rest as a down paymnet on a house or condo if you do not own one now.

Paying off non-deductible debt can b e a better long term use of money than an immediate tax dedcution.

You should find a financial consultant in your area who will give you a written financial plan.

Some like Fred Snyder ( will give you  such a plan as part of his sale or 'no sale' process.

Fred also gives two free seminars a week for clients and potential clients or just someone who wants to drop in.  There are about 25 different seminars which we used to charge significant dollars for. They aree broken down into income tax, estate tax, estate planning, financial planning, buying your first house, mortgage interest as a deduction, etc.

There are not a lot of financial consultants who operate like Fred but you might find one in your area.

By the way, you can listen to Fred every Sunday morning on CKBD radio in Vancouver or  on the internet at from 9:00 AM to 10:30 AM Vancouver (LA) time.  The program is called "IT'S YOUR MONEY"

I am a guest on the program on the last Sunday of every month.
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Moving to Hawaii on L1 Visa, effect on income tax and Canadian residency if term extends past 3 years


HI David et al,

Thank you for creating such an informative site!

I have a few questions:

My Canadian parent company is applying for an L1 for me to work as an employee in Managerial/Specialized capacity for our US subsidiary in Honolulu. I will be paid in USD by US company and subject to American employment law and tax, etc.  I understand I am to file income tax in both countries, and do not understand exactly how the foreign tax credit works and if this should affect my negotiations at all for compensation.  Also, I don't understand how my Canadian residency might be affected since I am single woman with no dependants (father and brother live here but not sure if this classiefies as "family").  This said, is it wise to continue investing in RRSPs', etc while I'm away... Sorry this is a long question, perhaps I need an appointment? Any resources you can share to point me in right direction would be great.  I can afford a lawyer but not a senior partner, and this is the first move I've ever done like this.

Thank you!



If you are transferring to Hawaii on a full time basis, you will become a tax resident of the USA and will not need to file a Canadian return as long as you are there.

This assumes that you do not leave your home here empty and your car licenced and come back every couple of weeks. article IV of the Tax Treaty is very clear.  If you do not have a home availagble to you in Canada, yiou are taxed in the US on your workld income.  If you have mutual funds or bank accounts in Canada, tell the financial institution your new US address and they will deduct 10% tax on any interest paid and 15% tax on any dividends paid to you well a resident of the United States

You will have to file a departing Canada return for the  year you left. That return might require a T1161, 1243 and 1244 if you are leaving any assets behind.

There is a seven or eight year limit for an L1 visa.  If you decide you want to stay there "forever", you will need to be sponsored by the comapny for a resident alien or "green" card.

If you decide that you want to stay there be sure you do not fall into the trap that the company pays CPP (Canada Pension Plan) for you instead of US FICA (social Security and Medicare).

The reason is that You have to pay into US Social security for 30 years to receive a fair prorated share of your retirement pension. 

There is a provision that says that the comapny can  pay CPP instead of FICA for five years if the transfer is not expected to last five years.

Therefore, if your transfer is only for a 3 year period, the copmpany may want to invole that clause.  In my opinion, that is to your detriment if you intend to stay there.

Paying CPP instead of FICA saves the company a bundle but costs you a lot in retirement.

Do NOT invest in a Canadian RRSP while a resident of the USA.

I am available for individual; consultations.  The fee is $400 by phone or in person for an up to one hour consultation.  If you are physically in Canada at the time, GST of $24.00 is also charged.

In the meantime, goto and read the US/CANADA Income Tax section in the second box down onthe right hand side.  This is mainly aimed at American citizens living in Canada but you will get more ideas from it.
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Canada departure tax obligations - T1161 T1243 T1244


I am a Canadian with an L -1 A inter-company transfer VISA and have sold everything and have moved to the USA. I have purchased a home in Texas where I am working/residing and my daughter attends school. I am being paid and taxed at source in US dollars. Intention is to stay permanently and obtain green card. In the meantime, will I have any tax obligations ?

david ingram replies:

As described, you have no further tax obligations to Canada other than filing a final departing Canada return.

Your final Canadian return should show the date of departure and the exemption amounts on Schedule 1 and 428 should have the amounts pro-rated by the number of days you were physically in Canada.  I.e number of days in Canada divided by 365 times the amount on line 300 as an example.

Everything you own is considered to have been sold at the time of departure and if there is a capital gains, there will be departure tax to pay or you will have to post security WITH THE CRA.

If you had left a summer cabin or stock portfolio or other assets worth more than $25,000 behind, you would need to file form 1116

Complete this form T1161 if you ceased to be a resident of Canada at any time in 
the year and the fair market value of all the properties you owned when you
left Canada was more than $25,000, not including the following properties:

i) cash (including bank deposits);

ii) pension plans, annuities, registered retirement savings plans, registered
retirement income funds, retirement compensation arrangements, employee
benefit plans, and certain other deferred benefit plans;

iii) property you owned when you last became a resident of Canada, or
property you inherited after you last became a resident of Canada, if you
were a resident of Canada for 60 months or less during the 10-year period
before you emigrated and the property is not taxable Canadian property; and

iv) any item of personal-use property (such as your household effects,
clothing, cars, collectibles) that has a fair market value of less than

Attach a completed copy of Form T1161 to your income tax return. File your
return by the filing due date. The penalty for failing to file Form T1161 by
the due date is $25 a day. There is a minimum penalty of $100, and a maximum
penalty of $2,500.

List of properties

List below all properties and their fair market value, and indicate either
(C) for Canadian or (F) for foreign properties (outside of Canada), that you
owned on the date you ceased to be resident of Canada.

Property includes shares (both public and private), bonds, debentures,
promissory notes, treasury bills, interests in trusts, interests in
partnerships, personal-use property, business property (including inventory),
real estate, and security option benefits.

Do not list any property described in (i) to (iv) above. If you need more
space, attach a separate sheet of paper.
If you were leaving a cabin, Or stock portfolio or rental house or trust  behind or if you had owned a place in Texas for five years and it had gone up in value, then you would have had some deemed sale departure tax,.  You would calculate it out on forms 1243 and 1244 and might have to post security with the CRA at the time if you did not have the cash to pay the tax.

However, if you sold everything before you left, you will not have 'departure' tax, but you might have capital gains tax to pay on your final return because of the actual sales as opposed to a deemed sale.
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Working as a part time consultant in Canada - New US Canada Tax treaty Protocols

Does an American who works part time, as a consultant in Canada, pay taxes in Canada or the U.S.,on the funds received, from the work in Canada?

david ingram replies:

Prior to Jan 1, 2008, it depends upon the contract, the work location, the visa the consultant is working under and whether the income was earned before or after Jan 1, 2008 under the terms of the new treaty that was signewd / passed on Sept 21, 2007.

Prior to Sept 21, trhere was no doubt that if a self employed person worked in Canada and did not have a fixed base of operations in Canada  while continuing to live in the USA, that Self-Employed person did not pay tax to Canada although they had to file a tax return and claim the benefits of Article XIV of the treaty.

Article 9 of the new Protocols,  (find the whole amendment at ) deletes Article XIV and my reading does not find it addressed specifically other than by the new terms of Article XV of the treaty which is amended by Article X of the protocols.  ( Iam wiling to be corrected here Andrew or Gary or??)

This new amendment refers to salaries, wages amnd other remuneration and seems to take into account that self-employed consultant's fees.  In this case, they will be taxable in Canada first if the amount exceeds $10,000 or the consultant is in Canada more than 183 days. 

Now thse new protocols are being introduced in a graduated manner.  Article 27 of the new protocols states that the new rules will take effect on Jan 1, 2008.  Other specific dates are being used for other articles with one going back to Sept 17, 2000 and othe parts (article 3) not taking effect until the third year.  Assuming you are earning over $10,000 in Canada, under Article XV of the Treaty you should expect to pay tax to Canada first and claim a foreign tax credit on your US return by filing US form 1116..

Hope this helps �