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Employee of Canadian branch doing work for the US branch in the US: which visa?


I've been under TN for one year now (contract employee of a California based firm). Talked to you twice so far, and you always have great advices.

That Californian company now have a Canadian branch and they want to hire me in Canada (regular employee, not contract). My work still requires to go to the US in 1-2 weeks blocks, less than 6 months total.

Under what class of visa can an employee of a Canadian branch enter the US to do work for the US branch?

I am trying to understand how this would fly (if it does).

Thank you,

david ingram replies:

The Canadian company would obtain a TN for you in their name. If they want to be classier, they will get you an H visa.

However, you would still be liable to file and pay US federal and California taxes for the period you work in the USA.

It would not be double taxation but could cause a cash flow problem.

Your company should adjust your Canadian dedcutions for income tax to allow youto make some installment payments to the US and California. 

When you prepare the US 1040NR and California 540NR, you will claim the taxes paid to the US as a foreign tax credit of Canadian forms T2209 and T2036.

You should get credit for every cent on your Canadian return. �
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Canadian with green card wants to work in Canada, keep US residency.

Hi there,

My girlfriend is a Canadian citizen working as a landed immigrant (green card) in California. I live in Vancouver, and she has applied for a job here so we can be closer. However, she doesn't want to lose her green card. So at the moment we've planned that if she gets the job, she will live in Point Roberts and commute daily -- remaining a U.S. resident but working in Vancouver, paying taxes in both countries, etc.

So, a few questions. First, is this strategy even possible? Second, if so, do we need a consultation to sort it out? Third, if so, can you advise me how long/how much this consultation would be (it would probably have to be by phone).

david ingram replies:

At any time I will have 20 to 50 clients doing exactly what you are proposing.

She can move to Point Roberts or Blaine and commute to work in Vancouver.  she will pay full Canadian  taxes BUT will NOT qualify for  BC Medical coverage because she is not sleeping in BC.  she will also have to prepare a US tax return.  However, because she will have paid full taxes to Canada, the foreign tax credit will mean there is no tax payable to the US unless she has some other US source income.

She should start her application for US citizenship immediately if she has spent her time there already. Then, when she gets her US citizenship, she is free to come back to Canada and still return to the USA at will.

An alternative is to fill in US form I-131 which will give her the right to leave the US for up to a year at a time and still maintain her green card.  This must be filled in annually and means that any time she has accumulated towards citizenship is lost and she has to start over again. 

You would likely benefit from a phone consultation.  I charge $424.00 (inc GST) for up to an hour and you should phone (604) 980-0321 between 10:20 and 4:00 M to F and talk to Gillian Bryan to make an appointment. 

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Question on US Social Security and Canadian Residency

Mr. David I’ve seen your reply posts on and impressed with your knowledge. I have a question and hope you can respond.

I’ve been working on H1B in the USA for 6 years and almost made 24 Social Security points along with retirement fund up to $50K. I’m Canadian Immigrant too and kept coming back and forth to USA and Canada. I’ve passed the Canadian citizenship test but they asked me to prove the residency that I’m going to do soon. I don’t know if they will award me citizenship or not. I’m originally from Pakistan. Lets say if Canada didn’t give me Citizenship and I don’t get a GC in USA, how would I recover the money I contributed in the Social Security in the US?

Thanks for answer in advance.




david ingram replies:

This is a problem.  although the US has now signed Social Security Totalization Agreements with 20 countries, Pakistan is NOT one of them.

Therefore, if you end up back in Pakistan with less than 40 credits, you will  not qualify for Social Security unless you stay away for a year and then return on another H1-B.

On the other hand, Canada does have a treaty.  If you are going to leave the USA anyway, I would  advise you to get back to Canada and get your citizenship by living an working here.  Once you have your Canadian Citizenship, you can work in the USA under TN (Treaty NAFTA) status.

In spite of postings on some sites, you can NOT get your Social Security Tax Payments back If working on an H1 or H2 basis.  It is possible to exempt Social Security Payments if you are from a Tax Treaty Country on an L visa and expected to be in the US for less than five years.

And a TN visa holder who continues to live in Canada and commutes to work in the USA on a 1099 contract basis without a fixed base of operations in the USA can be exempt from paying Social Security AND Federal Income Tax under the US/Canada Tax Convention and the US Canada Social Security Totalization Agreement.  This is a rare occurrence but does happen.

If you have been living and working in the USA for the last six or seven years, you have likely abandoned your Canadian status because you have to have been in Canada for 24 out of any past 60 month period to maintain your PR status UNLESS you are married to and living with a Canadian citizen spouse in the USA OR you were transferred to the USA by / and are working for a Canadian company.

Canadian Citizenship requires you to have been resident in Canada for 1,095 days out of the last 1,460 (3 out of 4 years).

Of course, you can leave the US for a year and qualify for another round of H1 visas in the future. 

I know you are from Pakistan but I am always reminded of one of my favourite client's opinions. 

He said that the best life was:
1.   An Indian wife
2.   A British house
3.   Chinese Food
4.   An American salary

He and his family have taken a year off and returned to India for a year to requalify for another round of H1's.
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Mohammed B. Wanli, - Con Man


This is unusual on this site but since you might well find yourself in this fellow's clutches, I pass this on.  Without looking hard, I have found his ads in the Yellow Pages in Manitoba, Saskatchewan and Ontario.  Presumably, they are in other places as well.   Please note, that I am not a lawyer or CPA or CA myself.  I did take and pass the Canadian Immigration law course for CSIC at UBC in 2004/2005 and had already been grandfathered into CSIC as a transitional member before that but finally chose not to join CSIC and concentrate on my tax practice and some NAFTA matters as it applied to my Tax Clients.    I can also say that in 40 years, I have only failed to get three visas on the first try.  In one of those cases, the fellow decided not to take the job with a Bellingham company and would not try the second time.   As you and  most of my clients know, I rarely,  if ever,  take money in advance.   david  -   Read on to see just how many people were affected by this fellow in two countries.  He currently has over 30 lawsuits against him in British Columbia alone. He also served three separate jail terms in Minnesota before coming to Canada.   In this case, a former client went to someone else for his taxes (it does happen) and then ended up coming back to me for some help as a witness because he was now suing the accountant he had used before me.  (It's a long story).  ----------------------------------------------------------------------------------------   xxxxxxxxx wrote:
Hi David,
Hope this meets you well...
Wanted to thank you again for all your help in the past, but also wanted to inform you of a website that a number of victims of Mohammed B. Wanli, the fraudster who claimed to be a "immigration consultant" and Lawyer.
Though devastating to me, I had no idea that he was this kind of criminal.
It may be worthwhile posting a warning in your newsletter about checking out your immigration counsellor... However, with Canada's privacy act it makes it VERY difficult to check anyone out...
All the best,
xxxx xxxxx
david ingram replies:

Thank you for the heads-up.

As you will remember, I was not happy with Wanli at the time when you brought him to my home office.   After reading the info about him, it is pretty likely that he was responsible for the information which Pxxxx xxxxxx came up with that was so troubling to you at the time.  Luckily, your case was so strong that you won your case in spite of it all.

From what I have read today on several different websites, it seems that your man M B Wanli was likely guilty of using information in a pseudo extortion type manner and I will bet that he was playing both sides of the fence with you and Pxxxx xxxxxx.

I know that Wanli was not happy when you brought me into the picture.

I presume from this that you have now ended up in court or are close to being in court with M B Wanli.  If you are, I would suggest that it is good money after bad because it is obvious he has nothing.  Even the Bankruptcy Trustee, Sands and Company is suing him..
Hope it all worked or works out for you.

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Getting a fiancee into - The Fiancee

I have a friend here in PR who you can help if you have the time.
He is a Canadian, with an American fiance. She has been turned back at the border twice. He is dealing with a lawyer now, and his MP, but I don't know whether there is anything else to be done. You could probably tell him. He is a really nice guy, a writer. He also has a day job, I'm not sure what. And no, he's NOT the other xxxxxxxxxxxxxxxx (I think the other one is dead, anyway.)
He's the kind of guy that you would really like, feisty and smart:
[email protected]
Perhaps you could send him some newsletters, or open a dialog.

----- -------------------------------------------------
 david ingram replies:  

Your friend's fiancée needs a "border kit" for her visits to Canada assuming that she is just coming to visit at this time. 

If she is coming to 'live' with him, she is inadmissable without a visa and there is no fiancée visa to come to Canada since June 22, 2002.

Unless she gets a work visa, she will not be able to enter without a ministerial permit (which the MP may be able to get) as a visitor unless she can prove to the person at the border that she is here as a temporary visitor and intends to return to the US soon.  Soon is likely two or three weeks.

She needs a border kit to prove she is intending to return. the following is from one of the old newsletters.

You need a "Border Kit" to facilitate your entry to Canada or the US and prove to the US people that you live in Canada, that you work in Canada and  are returning to Canada and not trying to move to and live in the USA and/or to the Canadian people that you live in the US, work in the US and are returning to the US and not intending to live and work in Canada at this time.

This kit would consist of a 3 ring binder containing items like:

 *     copies of your last three year's tax returns
 *     copy of the lease or ownership papers of your residence
 *     copy of your driver's licence
 *     copy of your car registration
 *     letter from your employer stating your job and that she / you work in Canada or the USA
 *     copy of video club memberships
 *     copy of club memberships
 *     copies of phone bills
 *     copies of utility bills
 *     copies of Insurance policies
 *     copies of anything that indicates you are intending to return to your home country in a short period of time. *       letter from your employer stating where you work.
This is not everything by any means but should be looked at as a minimal amount of documentation to have.


 If the fiancée does not have a home or a job in the USA or is enrolled at a university course she is returning to in September, it is unlikely she will be allowed in.  

The USA does have a Fiancée visa which takes anywhere from 3 months to a year to get.  It requires them to be physically married within 90 days of the entry of the Fiancée to the USA. 

The US does NOT recognize common-law, same sex or conjugal unions, but 'Any' of these will qualify for entrance to Canada.   Your friend can not sponsor a fiancée.  However, if they have been together in a conjugal relationship for a year or more or have lived in a common-law union for  year or more, he could sponsor her by filling in the following paperwork.  of course, if they get married, he can do the same.    

This older question will give the documents necessary to sponsor her if they are already in a conjugal or common-law union of a year or more or if they decide to get married.
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"unlocking" federal locked-in RRSP for resident of Brazil

Dear Sirs,   I have visited the Centa web page and it appear that there may be a way for me to "unlock" a federally controlled RRSP however I would like clarification and direction as to how this may be achieved.   I worked for the CPR in the late 1980's and thus the locked-in nature of the pension plan (I was a resident of Saskatchewan at the time). I am now a resident of Brazil (and have been for 6 years). Is there a way for me to "unlock" this RRSP? If I have to wait until I am 65 it just means the government of Canada will get more money due to the 25% non-resident withholding tax.   Please help.   Kind regards, xxxxxxxxxxx ----------------------------------------------
david ingram replies:

If you have a real good reason and safe use for the money, you can unlock a federal pension which was rolled into a locked in RRSP.

According to the Pension Benefits Standards Act (1985), and its Regulations, a non-resident is described as a person who has ceased to be a resident of Canada for at least two calendar years, and has lived outside the country for at least 184 days for each of these calendar years. 


If a former member of a pension plan meets the above requirements of section 28.4, the funds from a locked-in RRSP or LIF may be unlocked.

However, it is up to the plan administrator of your financial institution to determine whether you meet the requirements of the regulations.

Article IV(2) of the Brazil Canada Income Tax Convention determines which country you are a tax resident of.  Giving the plan administrator copies of your last two Brazilian tax returns and a copy of Article IV might be enough to have them release the funds (with a 25% tax holdback).

If not, you have to write to the CRA at 2204 Walkley Road, Ottawa, K1A 1A8 for a written opinion from the CRA.  Filling in form NR-73 and sending it to them will help.

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Seasonal rental home in BC Owned by US citizens -NR-6 NR-4


I have a home at a BC interior ski hill. We had it built in 2000 and had a rental agent there make a few rentals of it in 2001 and manage it's upkeep for those rentals. He referred us to his CPA for tax returns. We also used this rental agent for  2002. After that we changed to the agent we still currently use. This last spring the first rental agent came up to me and said he had to go to tax court and expected to lose the case and would owe the government $8000.00. He said that it was our fault for not filing the 2001 return on time. This last May he sent me an email demanding the $8000.00 .  No documentation, explanation was provided. So is this possible and if so how could it come about.  What would my responsibility be. Revenue
Canada gets my returns , they know who I am. I might add that the rentals were $14,000 gross and of course the mortgage interest was more than that so the return we filed shows a small loss as is always the situation.

Thank You 
david ingram replies:

I wrote the following in my ULTIMATE TAX GUIDE  in 1989.  You can find it at about two/thirds of the way through the 'US/Cdn Taxation Section'. Note that it says clearly that  the agent is responsible to pay 25% of the gross if the US resident does not file the tax return. In reverse, the US charges 30%.


More important perhaps is the problem with rental properties in Canada. When owned by a non-resident, they are subject to a 25% withholding (or 15% if living in Bangladesh) tax. If the renter does not pay this tax,  the government can come along two or ten years later and demand the tax.

Imagine the consternation of a tenant of a house in the British Properties in West Vancouver, or Rosedale in Toronto. Assume the tenant has been paying $2,000 a month for a $500,000 house owned by a Hong Kong resident. After three years of paying $24,000 a year to the `non-resident', they finally buy a house and move. Two months later, there is a knock on the door and a National Revenue representative is standing there demanding 25% of $72,000 for NON-RESIDENT withholding tax (this is a true story by the way, only the owner was in London).

There is a way around this problem. The tenant can ask to see, or rather DEMAND to see a copy of the landlord's filed and accepted NR6 form. (See forms in back of book). This form allows the tenant or agent of the landlord to deduct a lesser amount (or nil if a loss) than 25% of the gross rent. It allows for expenses to be taken off and the tax can then be withheld at 25% of the net, rather than the gross. The property management division of david ingram & Associates Realty Inc. files about 300 of these NR6 forms a year. (This is only necessary if you are paying directly to a landlord whom you KNOW to be a non-resident of Canada.  If you are paying to an agent or Canadian Resident, you are okay.)

Please note, the NR6 MUST BE FILED BEFORE the first rent cheque is received or 25% of the gross rent must be remitted. For years, we were in the habit of filing `this years' NR6 late with last years tax return. In 1989, National Revenue stopped accepting this sloppy practice and demanded them on time.



If paying 25% of the GROSS rent to Canada sounds bad, cheer up. The United States taxes the Canadian 30% in the same situation. To avoid this, the Canadian needs to notify the U.S. Government that he wishes to be taxed as a business rental house on the "net income" received. But if you do not notify the IRS in advance, the IRS CAN tax you at the 30% of gross rate.


In practical terms, the CRA is not a boogeyman here.  What usually happens is that the Agent pays the 25% of the gross rent and issues an NR$ in your name crediting you wiht hte 25%.  You do your tax return late and the CRA refunds the money to you and you give the money back to the agent. 

However, that is only good for ONE time, AND if 'you' the owner are chronically late, the agent is responsible.

I do not know enough to comment further.  However, Ii can tell you that at this moment, I have not personally seen a single case where the money was not eventually refunded if the parties co-operated.

If you filed an NR-6 for 2001 and 2002, this situation is clearly spelt out on that form.. If you were not on time, and the agent suffered a penalty and / or if you have not co-operated in the process, I would think that you do owe the agent whatever he or she is penalized becasue his penalty is based upon your failure to file on time.

If your returns were filed on time, he is not subject to penalities.

One of the problems in Whistler is that there were a dozen unlicenced and unregulated operations acting as property managers.  I personally informed 4 of them about their duties when their clients (individuals like yourself) came to me to prepare their US/Canadian income tax returns. 
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Using rental duplex as security for rental triplex

My question is: Canadian-specific

QUESTION: Hi there:
I recently borrowed equity against my current owner live in rental duplex, and used it as a downpayment and purchased a triplex investment property. Would I be able to deduct 50% of the interest on the equity against my duplex rental income? Was I better off to sell the current duplex? Should I deduct my expenses (repairs etc) from rental income, what are the implication sfor future do I have to then pay capital gains tax? Do I still have to pay capital gain tax if I dont deduct expenses (repairs,... non-operational expenses)? Thank you so much.

david ingram replies:

If the loan on the duplex which you live in was used to buy a rental triplex whuich you do not live in, then 100% of the interest on the down payment loan is deductible on the T776 (rental form) you file for the triplex. 

Although the loan is registered agaisnt the duplex, it is only deductible gains tthe triplex.

goto and click on the Tax  GUIDE section in the top left hand box.

Then click on the rental section and then the capital gains section for some more ideas.  In the capital gains section pay attention to Saccamona who sold a triplex he lived in tax free as a principal residence.  If you live in the duplex, its eventual sale should be tax free based on this case.
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US Citizen living in Canada working for US Company


I telecommute.  is the US company required to make deductions?  If so, is there an amount of income that is exempt? --------------------------------------------------------
david ingram replies:

Assuming that you are doing all your work in Canada and are paying your proper tax to Canda, there will be no tax liability to the USA on those earnings.

Therefore, it does not make any sense that the company would deduct any US tax whatsoever. 

Canada is a sovereign nation with a tax treaty with the United States.  Even though a US citizen is required to file a US tax return no matter whee they live, Article IV(2)(a)(b)(c)and (d) of the US/Canada Income Tax Convention spell out where you pay tax on your world income first and it would have you pay tax on your world income to Canada first as described..

As a US citizen, you are entitled to foreign tax credits and an earned income exemption of up to $82,400.00 against the income earned in Canada.  

You would calculate and pay your Canadian tax first and then report it again on your US 1040.  You would claim a foreign tax credit for the tax paid to Canada on US form 1116.

If you have children, you can file form 8812 and claim a refundable tax credit for up to $1,000 per child. 

But your question was about the US ompany deducting US Federal and maybe even state tax.

There is no onus on Your US employer to deduct any taxes from you whatsoever unless you have been transferred to Canada for a period of five years of less.  If that is the case, they can write to the Canada Pension Plan and ask for permission to not deduct CPP and continue paying (and deducting) FICA but that is all.  If you are working in Canada, a sovereign nation, they either have to dedcut Canadian Income Tax, Provincial Income Tax, CPP and EI, or pay you as a contract employee with no deductions by means of a 1099.

An analogy would be if you worked and lived in California and your company was in Chicago, they would NOT deduct Illinois state tax.  If they did, you would be all over them saying "I work and live in California, why would you deduct Illinois Tax, what are you thinking". You might even be a little sarcastic and cast aspersions on the intelligence of the HR person who would deduct Illinois when you live and work in California (or Ohio, Minnesota, Oregon or Rhode Island for that matter).

(On the other hand, a Tennessee person telecommuting to New York WAS taxed New York State Tax last year but he was also physically working one week a month in New York).

If you have been in Canada over a year and got all your US tax back in 2006, you can even use line 7 of a W4 form to have your employer stop making deductions. 

Best and easiest would be for you to become a self employed service and bill them on a 1099 basis. In this case, they shoud pay you the amount of their payroll taxes and holiday and frigne benefits extra.

The following was the topic of a 5.5 hour semianr I gave last Sunday.


 I want to make it clear that what you are about to read applies to Americans who have never lived in the United States, as well as those who have emigrated from the U.S. to other countries (including CANADA).

 Even if they have no U.S. income now, and they have never had one cent of U.S. income in their lives, United States citizens are required to file a United States income tax return (reporting their world income) no matter where they live in the world if they have income from any source (including non-taxable internal earnings in an RRSP). There are severe penalties for failing to file an annual U.S. return. In one case, $190,000 of tax and penalties were levied against a U.S. citizen living in Vancouver, and shows that the IRS can go back to 1986 (or even 1967) with impunity. In this case, the gentleman has lived in Canada since 1986, and was told by professionals that he did not have to file United States returns. The IRS found him after he lost his U.S. passport in a robbery and had to get it renewed.

And, in case you are thinking this is a wealthy man who will just have to "pay up"; the person involved averaged less than $15,000 Canadian per year of earnings from employment for the years 1986 to 1995. This bill could have wiped him out for life, and HE LOST MONEY. A Canadian professional accountant told him explicitly that he did not have to file U.S. tax returns because he had lost money and he was living in Canada. It is true that MOST Canadians do not have to file Canadian returns if they move to the U.S., or Australia, or Germany, etc. BUT! ALL AMERICANS do have to keep filing no matter where they live.

If you ARE a U.S. citizen, and have not been filing your U.S. returns, you should get a copy of my November, 1993 CEN-TAPEDE and use the information in that newsletter to file your returns retroactively. Find that newsletter at in the top left hand box.

What else does an American in Canada (or Paris for that matter) have to worry about? 

1. Taxation of the Family Residence            Americans come to Canada and are amazed that the family home in Canada is income tax free. Unfortunately for the American, the sale of a Canadian (or Australian, etc.) family house is still reportable by the American on their annual 1040 income tax return ($250,000 US per person is exempt but should be reported and exempted.

2. Gift Tax (if this applies to you, read my February 1994 newsletter)     After selling the family house (which they think is tax free) it is not unusual for an American living in Canada to give their children some of the proceeds and buy a less expensive house or condo for themselves. A U.S. citizen can only give a child up to $12,000 a year before incurring U.S. gift tax. The February, 94 newsletter has all the rates, but suffice it to say that if U.S. mom gives her daughter $22,000 U.S. in one year, MOM OWES gift tax of $1,800 and has to file a U.S. 709 gift tax return.

 You might ask, "How will the IRS find out?" Easy! The daughter will go across the U.S. border with her new car, and a customs/IRS agent will ask her where she got the money to buy the car. Or daughter will buy a Hawaii condo with the money and when she is audited on the sale and asked "where did the money come from to buy the condo?" she will have to answer that "Mom gave it to her."

 This situation took place in my office the week I wrote this. I spent 21 hours over a 3 day period in a tax audit with a young couple, the tax department auditor, and a 1 1/2 year old tyke. The auditor spent 4 hours asking how much they spent for beer, diapers, clothing, rent, gas, travel, and Xmas gifts, etc., IN DETAIL back as far as 1986 for some items. The auditor was doing a "source and application of funds" audit and was particularly concerned with how much money the husband's father had given them, and just as importantly, when? After thirty-one years in the tax business, I still could not figure out whether the auditor was after the 35 year old "kids," or whether the auditor was after the father. I am inclined to think the auditor was after "dad."

 The auditor also mentioned the "close" cooperation which now exists between customs, tax, and immigration. She can get whatever she wants from any of the departments and we are seeing these ourselves almost daily. In addition, the U.S. and Canadian tax authorities are now proactive in their reporting. If a Canadian auditor is dealing with someone with an American identity or income (rental, stock, director's fees, etc.) the Canadian auditor MUST now automatically report it to the U.S. and vice versa because of the U.S. / CANADA Tax Treaty signed on November 8, 1995.

 3. Ownership of Foreign Companies (Also see September 94 newsletter)           If a U.S. citizen owns 10% or more of a foreign corporation, he or she has to file some rather rigorous forms with their 1040 tax return. Basically, Form 5471 requires them to recalculate the company's profits using a Dec 31 year end, and put their resulting share of profits (even if not received) on their 1040 return. Penalties for failure to file this form can add up at (are you ready for this?) $10,000 every 30 days late up to a maximum of $50,000. This can be even more significant if you own 4 Canadian companies. The hard part here is for the American to realize that his Canadian Company is a foreign company to the U.S. This, of course, also applies to A Canadian who moves to the USA and still owns shares in a family corporation in Canada – Usually dad gave them the shares.

 4. Taxation of "Tax Free" Dividends        This is always a heart breaking moment. A Canadian accountant has spent hours explaining to "hubby" why his wife should have "X" number of shares in his company and how beneficial it is because she can take out $30,000 (varies)  of actual dividends and not have to pay any tax to Canada because of Canada's dividend tax credit. They are totally dismayed and the accountant mortified to find out that the dividends were 100% taxable on her U.S. return, and that the U.S. does not recognize the Canadian dividend tax credit. In addition, she is also liable to file the 5471 forms mentioned in "3" above or suffer the penalties.  And, she must file the TDF 90-22.1 mentioned in 5 below.

 5. Reporting of Foreign (Canadian) Accounts.      U.S. citizens with signing authority on foreign financial accounts which total more than $10,000 U.S. at any one time in a year must report the details of ALL the accounts to the U.S. Treasury in Detroit on a form TDF 90-22.1. Failure to file this "simple little form" carries a penalty of up to $500,000 PLUS 5 years in jail. Note that this form is filed with TREASURY in Detroit, NOT WITH the IRS. See the bottom of Schedule B of your 1040. And, of course, this applies in spades to a Canadian in the US.  As of about June 17, 2007, I am informed that the min penalty will be $10,000 for failure to file this form which is mentioned in the last two questions on the bottom of schedule B.

 Notice that this TDF 90 form requires details of accounts on which you have a signing authority. It does not need to be your account, or contain your money or securities. If you are a nurse and sign on the nurse's union account, you must report the details asked for on the form TDF 90. If you are a cub leader or a signing officer for your Kinsmen account or a deacon at your church and sign the church's account, you must give the details to the Department of the Treasury in Detroit. This also applies to RRSP accounts which are even more serious because they are also classified as "FOREIGN TRUSTS".

 6. Annual Taxation of RRSP Accounts      NOTE that ANY U.S. CITIZEN who owns a CANADIAN RRSP (which is a foreign trust under U.S. law) is liable for a fine of up to $500,000 U.S. PLUS 5 years in jail if they do not report the existence of the account to the Treasury Department as explained in item "5".

 In addition, there are further penalties for failing to report the RRSP earnings on an annual basis to the IRS. A new form 8891 was provided in 2004.  On an annual basis, you must report the following to the IRS:

1. The name of the financial institution holding the RRSP;

2. The total contributions made up to Dec 31, 2006 including rollovers;

3. The earnings (interest, dividends, capital gains) in 2006 (or any other relevant year) and

4. The balance in the account as of (at) Dec 31, 2006 or other relevant year.

5.  Any Withdrawals made in 2006 (or any other year)

Note that the internal earnings of the RRSP MUST be reported on the U.S. 1040 income tax return. The RRSP earnings can only be exempted AFTER reporting them under the US/Canada Tax Treaty. Note that residents of every country other than Canada must file form 3520 / 3520A Failure to file the 8891 is 35% of the principal plus 5% for each year not reported.  OUCH!!

7. Social Security Tax on Canadian Self Employed Earnings      If you are earning money in Canada, you are liable to pay U.S. FICA taxes of 15.3% on up to $94,200 of  earnings (2.9% over 94,200) UNLESS you file an exemption request under the US / CANADA Tax Treaty or Article V of the CANADA / US Social Security Agreement 

8. All Canadian Wages or Self Employed Income is Taxable in the U.S.  There is an "up to $82,400" U.S. exemption but to get the exemption, you HAVE to file the return and submit a form 2555 to claim the exemption. If you do not fill in the exemption form, your Canadian earnings are taxable on a U.S. return and you could end up with double taxation if you do not come forward voluntarily. Note though, that if the American in Canada has children, he or she can claim up to $1,000 per child refundable tax credit by filling in form 8812 and 1116 instead of form 2555.

Canadians performing services in the United States, and in 43 of the states in particular, are required to file the respective state return(s) and a US federal 1040NR or 1040 income tax return, even if their remuneration was paid from Canada.  This applies, but is not limited to:

*   Executives attending meetings in the US and, in particular, California,

*   Service technicians servicing Canadian products under warranty,

* Salespeople selling Canadian products in the US,

* Journalists (e.g. covering Canucks Hockey games, INDY races or O J Simpson trial),

* Horse trainers, race car mechanics

The above are exempt from tax up to $10,000 of earned income but the taxpayer must file returns to prove his or her exemption per Article XV. If you earned over $10,000 in the US, US taxation depends on where the employer gets its ultimate tax deduction for the wages paid out. If you are in the US more than 183 days, you are usually taxable on your world income.

**                Entertainers, actors, musicians, performers,

**                Professional athletes, race car drivers, jockeys.

The above are exempt from tax up to $15,000 in gross earned income (which includes travel expenses) but still have to file the return to prove their exemption under Article XVI.

*** Transport Employees, Truckers, Flight Attendants, Pilots if over $15,000.

Transportation employees are exempt from tax in most cases even if in the US for more than 183 days, if they are exercising their regular employment.  They must, however, file the tax return to exempt the income.

Canadians with US rental properties must file a 1040NR with schedules E and 4562 and the relevant state tax if in a taxing state. The penalty for failure to file the 1040NR EVEN IF YOU ARE LOSING MONEY is $1,000 to $10,000 per owner plus 30% of the Gross Rent with no expenses allowed.
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Dealing with cross border investments - Dan Walkow Seabank Capital , Darrel Thompson Blackmont securities - Stansberry & Ass

QUESTION:   Is Stansberry & Associates a legitimate firm?


So far as i know.

One person on the list wrote to say that they had satisfactory dealings with them after I wrote the following:

If the problem is dealing with cross border investments, I usually recommend Dan Walkow and / or Darrell Thompson

as in this older question about the same firm

QUESTION: 1. have been trying to find ethical investment firm to go with in Canada and can not seem to get any unbiased answers We live in Red Lake Ontario (landed immigrants), but are also US citizens

2. Is this Stansberry & Associates legit, as they seem to have many different opportunities claiming great returns
Pinchot Retirement Plan,  Master Limited Partnership, Market Index Target Term Security , Oakmark Select Funds
Thanks greatly looking forward to your email

--------------------------------------------------------------------------- david ingram replies:
I have no good or bad knowledge about Stansbery and Associates. None of my clients deal with them to my knowledge.

From looking at their website, they seem to be a newsletter operation as mucyh as anything.  I have about 15 interviews with newsletter writers on gold (John Embry), oil, uranium (Martin Kafusa), silver (Sean Rahkimov) real estate (Ozzie Jurock), futures and commodities (Victor Adai), Resources in General (Elsworth Dickson, Publisher of Resource World)  etc at - mostly in the third column.

Two ethical people who specialize in selling securities, RRSPs, etc., to US citizens in Canada or Canadians in the US  are:

Dan Walkow
Seabank Financial
White Rock
Local     (604) 541-9952
L D        (866) 541-9952


Mr Darrell Thompson
Blackmont Securities
Local    (416) 874-8007
LD        (866) 775-7704 __
These two individuals and their companies have gone to the effort to get themselves registered just about everywhere so they can deal with a Candian in Florida or California or Nevada, etc.

Note that because of their specialty, they tend to deal with accounts in excess of $200,000

However, both parties would welcome an exploratory call. �