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NON-resident - TESKEY decision in Dennis Lee case - David MacLean Case

QUESTION: My broth-in-law is a Canadian citizen who has been residing
outside Canada for years, however, he will come visit his father-in-law once
in a couple of years. He has no oversea incomes and has not paid any tax in
overseas country. He did not report Canadian tax in the past years, even
though he owns a bank account and a condo which he left it vacant for years.
He bought another condo for renting investment last year, and he is thinking
of preparing tax for the year of 2006. My question is that: If a canadian
resident has no income at all, does he/she have to report a tax file as long
as he/she is not taking any of canadian benefits but only paying property
tax and holding a bank account for mortgage installment?

david ingram replies:

Canada has the right to tax a Canadian citizen on their world income when
the citizen does not have a tax home in another country. To have a tax home
in another country, he or she should be able to prove that they live in that
other country and are physically in their home country for most of the year.

If a person has a spouse and children in the other country where they
reside, it is relatively easy to prove where they live because all the
accouterments of living are with their family. It is more difficult for
single people who tend to use their parent's home as a mailing address, etc.

If he is a true non-resident, he will have had a resident Canadian sign an
NR-6 form for the rental real estate.

This is not an answer because I do not have enough information from your
question and have to say that it sounds like he should have a personal
consultation with me or someone like me about his residency status. In the
meantime, he should read the following:

Sent: Friday, October 13, 2006 2:21 AM
To: [email protected]
Subject: Can a Canadian non-resident own a Canadian-registered sailplane?

Don't laugh, here's the logic....

We are Canadian citizens, non-resident for the last twenty years and have
filed as such each year for that entire period.
We have three Canadian residential rental properties but no other
discernible ties to Canada that I can think of.

I know that some Canadian non-residents maintain and annually utilize
holiday cottages as these are not winterized and therefore "are not
available for year-round use". Could a sailplane be owned without affecting
non-residency status for the same reasons i.e.. the machine can only be used
in the Canadian summer as by definition. Winter conditions preclude it's
use; for the winter it is physically disassembled and kept in a box....

Just wondering what you might think.
david ingram replies:

Since I know of people who have been taxed because of the ownership of a
cottage, I disagree with the year round use definition you have suggested.

And I have had the ownership of a golf cart or a car registered in a
father's name used to tax an individual.

Coming back to a summer cottage or a sailplane in Canada is dancing with
rattlesnakes in my opinion.

The term in article IV of most treaties is "home available" to him. The
words "year round" do not appear anywhere in the act or cases that I know of
although I am prepared to be wrong if anyone wants to correct me and give me
some case law to look at.

I was related by marriage to Ralph White an old time altitude record
sailplane pilot at Cowley, Alberta.

Read the following which was mainly written 20 years ago and only had a
couple of minor additions until Jan 2001 and nothing since. It comes from
the middle of "US/Canada taxation" in the second box down on the right hand
side at

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I have just been offered a position in the UAE starting in
October and lasting 2 to 3 years.
I plan to leave XXXXXXX at the end of September, return to Vancouver for a
couple of weeks and then travel to the UAE.
For this assignment their is NO "Hypo Tax". I am provided housing, kids
schooling, car, COLA,...(typical policy).
I am also planning on renting out my home (principle residence) and
currently looking for a Realtor or agency that handles that (know any?).
My rental plan is to rent the house furnished complete with gardening
services, pool maintenance, monitored alarm and others for $4500 per
month. Of that money approximately 1300 is my mortgage payment and 400
towards a line of credit that was also used to purchase the house. At a
glance that is very profitable but their is a lot of expenses in renting
out a furnished, serviced house. I am still unsure how best to deal with
utilities and will discuss that with the Realtor.
Although I cannot guarantee it I hope to make this my last long term
overseas assignment and then spend some time working in Vancouver and
enjoying life. Financially my goal is just to pay off all or most of my
mortgage with this assignment (325,000).

My questions:
1. What advise can you give me on this assignment?
2. Is the money really tax free?
3. I think I end up a resident of UAE, and worry about the tax implications
of my home value (capital gains) and any other concerns.
I do not yet know how I am paid, if paid in UAE how do I bring this into
4. How can I best limit my taxes on the rental income?
To really complicate things part of the deal I am currently involved
with on this XXXXXXXX assignment is that XXXXXXXX accountant (XXXXXXX XXXXX
in XXXXXXXXX) must do my taxes. This is so that XXXXXXXXX can maximize their
concern in my taxes. I would like to get you doing my taxes perhaps
jointly(?) with XXXXXXXXXX next year for 2006 and then alone once I am out
of XXXXXXXX's tax grips.

5. Finally how is the best way to pay/invoice your services?
david ingram replies:

I just received this today - I was away for the last two weeks of August and
then on my return some 7,000 emails clogged up the system.

1. start off by reading the entire US/Canada section in the second box down
on the right hand side at - You will see Judge Teskey's list
of the things that make you taxable in Canada.

2. The money is tax free in Canada "IF" you manage to sever all the relevant

3. A disadvantage is that while you are a non-resident of Canada, any
capital increase in your house "is" subject to Canadian Capital Gains tax.
However, I am one who does not expect any big rise for the next 4 years.

4. Not much you can do. The net rent after management, property taxes,
mortgage interest, landscaping, etc. will be subject to Tax at about 25%.

5. Visa, MasterCard, cheque.

6. A rental Agent that can handle your out of country rental would be Ross
McDonald at Lighthouse Realty (604) 649-4871 or Crosby Management
(604)689-6902. Ross was my property management partner for many years and
manages some 100 properties for out of country owners. I no longer know
anyone at Crosby, but have three clients who use their services and seem

You should likely make an appointment and come and see me (with your spouse)
while in Vancouver.

david ingram

The following is the answer to another UAE question:

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question to [email protected], posted a question online at or
possibly at


We own land within a co-op on xxxxxx island, and a house in xxxxxxx that is
leased. We are both residents in Canada and have two children. We have RRSPs
and RESPs. What is the best course of action to take regarding taxes and
working in the UAE? We plan to be gone no more than three years. Thank you.

david ingram replies:

To go to the UAE and escape Canadian Tax you have to MOVE there, virtually
lock, stock, and barrel.

If your home is rented out on a long term basis and not available to you to
live in for a year, that usually solves the problem of the house being

I am giving you a long loonnngg prior answer. However, if you are genuinely
going, you should consult with someone like myself to be sure.


QUESTION: RE: answer posted on Jan 11
I am a Canadian non-resident living and working in the middle east (6 years)
with my wife. We had cut ties with Canada (even drivers licences have now
expired) but last year put a deposit on a condo in Edmonton since we
anticipated moving back in the next year or so if employment terminated
here. However we have new contracts and expect to continue to stay away for
an indefinite period. Would lending finance to our son (a university student
who needs somewhere to live) to purchase the unit (and then for him to live
there) cause significant problems with our non resident status??
david ingram replies:

Anything you do in Canada is liable to cause you a problem. However,
loaning the money to your son to buy a condo should not pose a problem.

However, I would have been happier if it had been in his name to start with.
The fact that it was originally in your name and is now going into your
son's name could lead a suspicious CRA employee to think that it was only
going in his name to make it look like it was not yours and not available
for your use.

Whatever you do, DON'T stay there if you visit Canada!

Remember that the Rule is that there can NOT be a home "available" to you.
It does not have to be registered in YOUR name to be "available”. Staying
in it would be an absolute proof that it was available. Particularly, if
your son chose that time to stay with a friend or something and if it was
found to have your furniture “stored” in it.

Read Judge Teskey’s list in the following older questions:

Sent: Saturday, February 04, 2006 6:14 AM
To: [email protected]
Subject: Canadian with US Investments

I am a Non Resident Canadian citizen living and working in Saudi Arabia.
I have been out of Canada for more than 10 years.

I have stock investments in Canada and the US.
I am listed as a Non Resident with these brokers.
I already have 25% Non Resident Tax deducted on interest income or

These are the only investments I have in Canada or the US.

Do I have to file a tax return in either country?

david ingram replies:

As a non-resident there is no tax payable to the US or Canada on publicly
traded stocks.

As long as tax on dividends and interest is being deducted and you are
receiving NR4 slips from Canada showing that fact and 1042S slips for the
US, there is no reason for you to file a return in the US or Canada.

However, Canada DOES have a habit of taxing people who return from Saudi
Arabia because they kept things like a Canadian Driver's licence.

My advice would be to switch all your investments to the US broker and
closing down the Canadian accounts.

Read the following question and the "so what are the rules?" section from my
1991 Ultimate Income Tax Guide. i.e. it is all old stuff, not a new


QUESTION: I am a Canadian non-resident living in Asia for the past 11 years.
I am looking to buy a condo in Edmonton for investment purposes. If we do
not rent it out immediately and it sits empty to be used occasionally when
we visit family in Edmonton, will this jeopardise our non-resident tax


david ingram replies:

If you are in a tax-treaty country like Thailand or Indonesia, it will not
matter because your family is with you in Asia. However, if your spouse
wanders over to Canada and stays in the condo for five or six months, the
CRA will have every right to try and tax you and may succeed because Article
IV of the tax treaty will have your personal interests in Canada.

The Dennis Lee decision by Judge Teskey is one of the best ones to read.
you can go to and click on US / Canada taxation in the second
box down on the right hand side and it will give you a lot of information.
I am repeating some of it here.


So what are the rules?

Well, to leave Canada for tax purposes, you must give up clubs, bank
accounts, memberships, driving licences, provincial health care plans,
family allowance payments (if you are a returning resident, you can continue
to get Family Allowance out of the country), your car, and furniture. You
can keep a house here as an investment and rent it out, but it must be
rented on lease terms of a year or more. And you MUST have an agent sign an
NR6 for you (see example). This NR6 has the Canadian Resident AGENT **
guarantee the Canadian Government that if YOU do not pay your tax to Canada,
the AGENT WILL. Even after fulfilling the foregoing, the Canadian government
can still tax you or "try" to tax you on your income out of the country. If
you are being paid by a Canadian Company, they can quite often succeed.

Even though you can collect family allowance out of the country, don't! One
client's wife found out that she could get family allowance out of the
country if she said they were coming back to Canada. She got some $3,000 of
family allowance and cost the family some $80,000 in income tax when they
came back to Canada from Brazil. I will never forget the husband's
expression when he found out why he had been reassessed and I will never
forget his wife's explanation. She said he was a skinflint and never gave
her any money. The total episode cost them their house.

** The "agent" referred to above can be a friend, relative, or a business
such as ours. We charge a minimum of $40.00 per month to be an "AGENT" for
an NR-6 filing. This $480 per year is "in addition" to any other fees but
"well worth it" of course. It stops your mother, father, brother, next door
neighbour or ex-best-friend from being plagued by paperwork they do not


It is possible to be physically "in Canada" and be treated as a Non-Resident
and it is possible to be out of the country for seven years, or never have
even lived in Canada, but wanted to, and be taxed as a Canadian resident as
the following three cases show. In case you missed it, the reason for the
different rulings is the "INTENT" of the parties involved. Wolf Bergelt
intended to leave Canada. David MacLean was only working out of the
country. He still maintained a residence and could not ever become a
resident of Saudi Arabia anyway. Dennis Lee "wanted" to live in Canada.

In 1986, Wolf Bergelt won non-resident status before Judge Collier of the
Federal Court, even though he was only out of the country for four months
and his family stayed behind to sell his house. He had given up his
memberships, kept only one bank account and rented an apartment in
California until his house in Canada was sold. Four months after his move,
his company advised him that he was being transferred back to Canada. Judge
Collier said his move was a permanent (although short) move and he was a
non-resident for tax purposes for those four months.

In 1985, David MacLean lost his claim for non-residence status even though
he was gone for seven years. He kept a house and investments in Canada and
returned a couple of times a year to visit parents. He had even been to the
Tax Office and received a letter on January 29, 1980 stating that his
Canadian Employer could waive tax deductions because he was a non-resident.
However, he did not advise his banks, etc. that he was a non-resident so
that they would withhold tax, he did not rent his house out on a long term
lease and he did not do any of the things that makes a person a
"NON-RESIDENT". Judge Brule of the Tax court of Canada said that he thought
Mr. MacLean had stumbled on the non-resident status by chance rather than by
design. In other words, to become a non-resident of Canada, you must become
a bone fide resident of another country. As a rule, only a Muslim born in
Saudi Arabia to Saudi Arabian parents can become a Saudi Arabian citizen.
The best that David MacLean can hope for is that he has a Saudi Arabian
temporary work permit.

In other words, when a person leaves a place, they usually leave and
establish a new identity where they are because the "new place" is where
they live now. Trying to "look" like a non-resident is not the same as
"BEING" a non-resident - think about it.

In 1989, Denis Lee won part but lost most of his claim for non-resident
status. He was a British Subject who worked on offshore oil rigs. He
maintained a room at his parents house in England and held a mortgage on his
ex-wife's house in England. For the years 1981, 82 and 83 he did not pay
income tax anywhere. in 1981 he married a Canadian and she bought a house in
Canada in June of 1981. On September 13, 1981, he guaranteed her mortgage at
the bank and swore an affidavit that he was "not" a non-resident of Canada.
[As I have said in the capital gains section of this book, bank documents
will get you every time.] During this time he had a Royal Bank account in
Canada and the Caribbean but no Canadian driver's licences or club
memberships, etc.

Judge Teskey said:

"The question of residency is one of fact and depends on the specific facts
of each case. The following is a list of some of the indicia relevant in
determining whether an individual is resident in Canada for Canadian income
tax purposes. It should be noted that no one of any group of two or three
items will in themselves establish that the individual is resident in
Canada. However, a number of the following factors considered together could
establish that the individual is a resident of Canada for Canadian income
tax purposes":

- past and present habits of life;

- regularity and length of visits in the jurisdiction asserting residence;

- ties within the jurisdiction;

- ties elsewhere;

- permanence or otherwise of purposes of stay;

- ownership of a dwelling in Canada or rental of a dwelling on a long-term
basis (for example, a lease of one or more years);

- residence of spouse, children and other dependent family members in a
dwelling maintained by the individual in Canada;

- memberships with Canadian churches, or synagogues, recreational and social
clubs, unions and professional organizations (left out mosques);

- registration and maintenance of automobiles, boats and airplanes in

- holding credit cards issued by Canadian financial institutions and other
commercial entities including stores, car rental agencies, etc.;

- local newspaper subscriptions sent to a Canadian address;

- rental of Canadian safety deposit box or post office box;

- subscriptions for life or general insurance including health insurance
through a Canadian insurance company;

- mailing address in Canada;

- telephone listing in Canada;

- stationery including business cards showing a Canadian address;

- magazine and other periodical subscriptions sent to a Canadian address;

- Canadian bank accounts other than a non-resident account;

- active securities accounts with Canadian brokers;

- Canadian drivers licence;

- membership in a Canadian pension plan;

- holding directorships of Canadian corporations;

- membership in Canadian partnerships;

- frequent visits to Canada for social or business purposes;

- burial plot in Canada;

- legal documentation indicating Canadian residence;

- filing a Canadian income tax return as a Canadian resident;

- ownership of a Canadian vacation property;

- active involvement with business activities in Canada;

- employment in Canada;

- maintenance or storage in Canada of personal belongings including
clothing, furniture, family pets, etc.;

- obtaining landed immigrant status or appropriate work permits in Canada;

- severing substantially all ties with former country of residence.

"The Appellant claims that he did not want to be a resident of Canada during
the years in question. Intention or free choice is an essential element in
domicile, but is entirely absent in residence."

Even though Dennis Lee was denied residency by immigration until 1985 (his
passport was stamped and limited the number of days he could stay in the
country) and he did not purchase a car until 1984, or get a drivers licence
until 1985, Judge Teskey ruled that he was a non-resident until September
13, 1981 (the day he guaranteed the mortgage and signed the bank guarantee)
and a resident thereafter.

My point is made. Residency for "TAX PURPOSES" has nothing to do with legal
presence in the country claiming the tax. It is a question of fact. My
thanks to Judge Teskey for an excellent list. The italics are mine and refer
to the items which I usually see people trying to "hold on to" after they
leave and are trying to become non-residents. No single item will make you a
resident, but there is a point where the preponderance of "numbers" leap out
and say, "He / She is a resident of Canada, no matter what he / she says."

The case above is not unusual in any way. It is a fairly typical situation
in my office.

In 1990, John Hale was taxed as a resident on $25,000 of directors fees he
had received from his Canadian Employer and on $125,000 he received for
exercising a share stock option given to him when he had been a resident of
Canada (the option, not the stock). Judge Rouleau of the Federal Court ruled
that section 15(1) of the Great Britain / Canada Tax Convention did not
protect the $125,000 as it was not "salaries, wages, and other
remuneration". It was, however a benefit received by virtue of employment
within the meaning of section 7(1)(b) of the act.

Even a car you do not own can make you a resident as the next sailor found

In 1988, Frederick Reed was claimed by the Canadian Government as one of
their own. He lived on board ship and shared an apartment with a friend in
Bermuda but only occasionally. He also stayed with his parents in Canada
when visiting his employer in Halifax. Judge Bonner of the Tax court ruled
that he could not claim his place of employ or the ship as his residence and
just because he did not have a fixed abode, did not make him a non-resident.
He was also the beneficial owner of a car in Canada which even though of
minor consequence, served to add to his Canadian Residency. He had in fact
borrowed money from a credit union to buy the car, even though it was
registered in his father's name. He had maintained his Canadian Driver's
licence as well.

An interesting case in June, 1989 involved Deborah and James Provias who
left Canada in October of 1984. They had sold a multiple unit building to
James' father on September 21, 1984 but the statement of adjustments did not
take place until December 1, 1984. They tried to write off rental losses and
a terminal loss against other income as `departing Canadians'. Judge
Christie of the Tax Court ruled that they had left before the sale and were
not entitled to the terminal loss or another capital loss as these could
only be applied against income earned in Canada from October 13, 1984 (the
day they left) to November 30, 1984 (the day before the sale) and there was
no income, only a rental loss.

But June, 1989 was a good month for Henry Hewitt. He had been a non-resident
living in Libya for four years and received some back pay after returning to
Canada. DNR tried to tax him on the money but Judge Mogan of the Tax Court
came to the rescue. He ruled that although Canadians were usually taxable on
money when received, that assumed that the money itself was taxable in
Canada, which was not true in this case.

In 1989, James Ferguson lost his claim for non-residency status but from the
information, it didn't stand a chance anyway. He had been in Saudi Arabia on
a series of one year contracts for four years. His wife remained employed in
Canada, and he kept his house, car, driver's licence, union membership, and
master plumber's licence. Judge Sarchuk ruled that he had always intended to
return to Canada and was a resident.

A similar situation involved John and Johnnie M. Eubanks in the United
States. He was working on an offshore oil rig in Nigeria with a Nigerian
work permit and attempted to claim non-resident status for the purposes of
exempting the foreign earned income exclusion. His wife was in the United
States at all times and because he worked 28 days on and 28 days off, he
returned to the U.S. for his rest periods using 4 days for travel and 24
days for rest with his family. He did not spend any 330 day period (out of a
year) in Nigeria and only had a residency permit for the purposes of working
in Nigeria. Judge Scott ruled he was a resident of the U.S. and taxed him
some $20,000 with another $6,000 penalties and interest.

The Tax departments in Canada and the U.S. issue Interpretation Bulletins
and Information Circulars and Guidance Pamphlets. These documents sometimes
get people in trouble because the individual reads the good part and doesn't
pay any attention to the exceptions. The following case ran contrary to a
Guidance Pamphlet issued by the IRS.

On and Off-shore Oil rigs were involved with William and Margaret Mount and
Jesse and Mary Wells. William and Jesse worked in the United Arab Emirates.
However, they kept their homes and families in Louisiana and kept their
driver's licences in Louisiana and voted in Louisiana. No evidence was shown
that they had tried to settle in The United Arab Emirates. Judge Jacobs
turned down claimed exclusions of approximately $75,000 each.

There isn't any question about what oil rig people talk about on oil rigs.
It has to be "how to beat the tax man". Unfortunately, they all seem to
think it is easy. Another such story follows.

In 1989, Clarence Ritchie found out that bona fide residence means just what
it says. You cannot be a non-resident of the U.S. for tax purposes if you
are not a bona fide resident of another country. He was working on the Mobil
Oil Pipeline in Saudi Arabia and although when he left he was married with a
couple of kids, by the time he returned permanently, he was a happily
divorced man. Judge Scott ruled that though he did not have an abode in the
United States, he had not established one in Saudi Arabia and therefore was
not entitled to the foreign earned income exclusion which requires you to be
away for 330 days out of 365. He had worked a 42 days on, 21 days off
schedule and usually returned to the U.S. for his days off although he did
spend time in Tunisia, England, Italy and Greece.

On a final note, as explained on page 143 of the "PINK" 17th edition of my
ULTIMATE TAX BOOK, it is possible to have three countries after you for tax.
If you are thinking of taking a job because a recruiter told you the money
is tax free, think twice and check three times with competent individuals
about what the rules "really are". No government likes giving up the right
to tax its citizens.


Non-residents of Canada with investments in Canada are subject to a 25%
non-resident withholding tax on any money paid to them while they are out of
the Canada. Therefore, if they have $10,000 in the Bank of Montreal and they
live in Argentina, The Bank of Montreal must withhold 25 cents out of every
dollar of interest paid to the account. Most tax treaty countries such as
Great Britain, Germany, the United States, and Australia have a reciprocal
agreement with Canada that limits the withholding to 15%. So we have the
anomaly that a Canadian with money in a bank in the U.S. has no withholding
but an American with money in a Canadian Bank has 15 cents out of every
dollar withheld as a foreign withholding tax. The American would report his
interest on schedule A of his 1040 tax return and claim the tax withheld as
a foreign tax credit on a form 1116.
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tax/work permit question for working in USA


I am a freelance translator/interpreter and have always worked within Canada working to and from French Canadian. I recently get a contract with an American agency to do interpretation at a sales conference in New York for a large corporate customer of theirs. I was interpreting into French for the Quebec contingent. This was a three day deal, five with traveling time with the agency booking the flight and hotel.

When I crossed the border I told the US customs people that I was simply going to get some sun but was not completely comfortable about "lying" about the reason for my trip. This contract is something which will likely be repeated twice a year under similar conditions.

My question is: if I am crossing the border to work in the States, even if for only such a short time, do I need some kind of visa or work permit? Also, I assume that since I send my invoice once I get home and receive their payment by mail that it is handled the same, tax wise, as my other American customers whom I send translations to by e-mail. Am I right or do I have to pay income taxes to the American government?

Thanks for any help.

PS: I asked this question on a forum on, a site for translators and interpreters, and got your address and a glowing recommendation on the forum.
david ingram replies:

I am not a member of the AILA and not a lawyer although I did graduate from the UBC Immigration Practitioners program for immigration to Canada and have been doing this for some 43 years now. My knowledge is mostly gleamed from talking to thousands of people and hearing what happened to them. I also think I wrote the first book on cross border visas under the FTA (now NAFTA) back in 1989.

To my knowledge there is no visa available which will serve your purpose in any acceptable time frame or cost factor if you are being paid by a US entity.

An Interpreter can enter the US to practice their trade for a Canadian business. If a Canadian company wanted you to go to Louisiana to interpret for a Cajun client of the Canadian business and you were paid from Canada by a Canadian company, you could go to Louisiana under the Terms of a B1 Business visitor status.

However, that would NOT qualify you to work at a US conference for a US corporation.

It likely WOULD qualify you to go to the US "with" the Quebec contingent if you were paid by the Quebec contingent.

To work for a US corp or entity, you would need an H1 visa which will take you about 18 months to get at the moment and the US corp has to sponsor you.

With regard to the "getting some sun" comment, you were lucky although hundreds of people say the same thing and get away with it. However, if they had looked at your diary or found a letter from the organization in your golf bag, etc., you would have been turned back and banned from the US for five or ten years at an airport.

If it happened at a land border, you would likely have found yourself in jail for three or four days and had to post a $5,000 US bond to get out. Then it would have been a court appearance and been banned for 5 or 10 years. (I had a gent who was banned for ten years at the Toronto Airport in my office today,) Oh yes, if you were driving a $1,000 car or a $100,000 car, it would have been seized.

As for tax, you should be filing a US Tax return. There is no tax to pay because you can exempt up to $10,000 as an employee (Art XV) and all of it if you were self employed and have no fixed base in the US under Article XIV of the US/Canada Tax Convention (Treaty). When you claim an exemption under the treaty, you have to file US form 8833. I will agree that most do not file the return but if caught, the minimum penalty for failure to file a treaty based exemption (8833) is $1,000 to $10,000 US.
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Using Smith Manoeuvre to make mortgage interest deductible

QUESTION: My wife and I have a $300K mortgage (Manulife One account) that we
have began converting into a tax deductible investment loan. Right now we
are doing this by borrowing back the principal each month to invest it. We
are looking to accelerate this conversion from good debt to bad debt by
starting an unincorporated business (ala Cash Flow Dam strategy). My
question is: if we purchase a cottage rental business or campground in a
Parnership with my parents will we be able to still borrow from our Manulife
One account to pay all the business expenses each month? Or is there a twist
because my wife and I don't own 100% of the Partnership or asset (campground
or cottage rentals)?

david ingram replies:

You can use the partnership income as well. Just watch your paper trail.

You should also go to and read the November 2001 newsletter in
the top left hand box. This was originally written in Nov 1976 and is the
first known place where making a Canadian mortgage deductible is explored in
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Interest as a deduction to borrow money to buy an RESP

My question is: Canadian-specific

QUESTION: Although the Smith Manoeuvre cannot be used with RRSP's, can it be
used with RESPs?

david ingram replies:

The answer is no!

However, you should also read my November 2001 newsletter which you c an
find at in the top left hand box.

This will give you some other ideas about making mortgage or other interest
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TN visa living in BC

Hello.....I was wondering if you could answer a question for me....

I am a Canadian citizen, living in Canada thinking of taking a job with a U.S. company under a TN Visa. The company is based out of Texas but it is a consulting job so the work will be at various locations in North America with the bulk of the work being in the Washington State area. I have property in Canada and will continue to live in Canada but fly to the US weekly or bi-weekly. I currently have a L1B Visa and also a U.S. Social Security Card that I obtained from my current job requirements.

My current company has always looked after everything related to taxes so I was never really involved besides signing the paperwork. Is there anything that I should be looking out for with regards to income tax or is it just a U.S. filing and a Canadian filing?

Also, do you prepare taxes on behalf of individuals?

Thanks for your time,

david ingram replies:

You will have to file a US tax return to cover the earnings in the US and also pay state taxes in the states you work in with a state tax return. Washington State does not have a return.

Because you are still living in Canada, your ultimate tax bill is to Canada. You will report all the income again to Canada and claim credit for all state and federal taxes plus the FICA and Medicare fees paid on lines 431 and 433 of your Canadian T1.

Because you are working in the US, being paid on a W-2 is fine but if you were working half time in Canada, I would suggest that you be paid on a 1099 basis (contract employee with no deductions).

We look after your type of return by email, snail mail, fax or courier or in person.

Phone consultations are $400 for 15 minutes to 50 minutes (professional hour). Please note that GST is added if product remains in Canada or a phone consultation is in Canada.

This is not intended to be definitive but in general I am quoting $800 to $2,400 for a dual country tax return.

$800 would be one T4 slip one W2 slip one or two interest slips and you lived in one country only - no self employment or rentals or capital gains - you did not move into or out of the country in this year.

$1,000 would be the same with one rental

$1,200 would be the same with one business no rental

$1,200 would be the minimum with a move in or out of the country. These are complicated because of the back and forth foreign tax credits. - The IRS says a foreign tax credit takes 1 hour and 53 minutes.

$1,500 would be the minimum with a rental or two in the country you do not live in or a rental and a business and foreign tax credits no move in or out

$2,400 would be all of the above and you moved in and out of the country.

This is just a guideline for US / Canadian returns

We will still prepare Canadian only (lives in Canada, no US connection period) with two or three slips and no capital gains, etc. for $150.00 up.

With a Rental for $350

A Business for $350 - Rental and business likely $450

And an American only (lives in the US with no Canadian income or filing period) with about the same things in the same range with a little bit more if there is a state return.

Moving in or out of the country or part year earnings in the US will ALWAYS be $800 and up.

TDF 90-22.1 forms are $50 for the first and $25.00 each after that when part of a tax return.

8891 forms are generally $50.00 to $100.00 each.

18 RRSPs would be $900.00 - (maybe amalgamate a couple)

Capital gains *sales) are likely $50.00 for the first and $20.00 each after that.

Just a guideline not etched in stone.

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Canada's 60 month rule for departure tax


I am a dual citizen and file both Canada and US tax returns since
returning to live in Canada.
I heard that if I reside in Canada for more than "60 months in any 10 year
period" and then move to the US, that Canada will impose a capital gains tax
on my US real estate as if I was selling it on the day that I moved back to
the US.
My question is: Will Canada also impose a capital gains tax on my US
variable annuity at the same time.

Any property (out of country property or in Canada property) you bought or
inherited while you "were" a resident of Canada is subject to Capital Gains
Departure tax whether you owned it for one month or nine years. The
exception is out of country property you owned before you came to Canada or
out of country property you inherited while you were a resident if you were
a resident of Canada for less than 60 months in the ten year period BEFORE
you emigrated.

You can find the reference in paragraph (vi) on form 1243.

The variable rate annuity is possibly covered by paragraph (iii) which

pensions and similar rights, including registered retirement savings plans,
registered retirement income funds, and deferred profit sharing plans

The question is can the annuity be included in (iii) or not. I do not know
the answer off the top of my head and am really too busy to look it up or
spend non-paid time at this time of year on it but I hope that by
circulating it to the 13,000 people who receive this, someone may know the
answer and send it back to me, _ PLEASE!!
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UK pension in Canada


Sir, Both my wife and I have about 10 years each of National Insurance fees
paid with UK Social Security system. Is it worth transferring this into the
Canadian pension system since we will be moving to toronto and intend to
work and stay there.

Thank you
david ingram replies:

There is no method of moving it or transferring it to the CPP. However,
when you do retire, you will be able to collect a pro-rated pension from the
UK in Canada. The disadvantage is that "at the moment" the UK pension odes
not index (i.e. increase with the cost of living) while you are in Canada
while it would if you were moving to the US. You need to write your
representative and get him or her to work at equalizing the rights of UK
pensioners in Canada with those in the USA.

This other two day old question (in reverse) may help you a bit as well.
My_question_is: Applicable to Another Jurisdiction or Multi-jurisdictions
Subject: Pension income
Expert: [email protected]
Date: Sunday February 04, 2007
Time: 01:21 PM -0500


I am a Canadian citizen living and working in England. I am maintaining my
Canadian bank account, credit card, RRSPs and other ties as I intend to

1. In Jan '07 I started receiving my BC work-related pension through
monthly payments deposited to my Canadian bank account. Should I ask that
25% be withheld for income tax? This is what I understand the tax guidance
to say. However, a friend here in England in the same circumstances tells
me that her Canadian pension is tax free while she lives in England. I
noticed that my first pension deposit was for the full amount with no tax
withheld although they know my situation.

2. Once my line of credit is cleared, I will be accumulating savings and
earning interest in Canada. I think the tax guidance says that 25% should
also be withheld from interest earnings. Is this correct?

Thank you very much for your advice.

(I recently asked for advice about my residency status and appreciated your
response but have not yet sorted it with ccra.)

david ingram replies:
1. Your pension is not subject to Canadian Tax under Article 17(1) of the
UK/Canada Income Tax Convention (Treaty) as follows. I have put the country
names in the brackets. Note that you (and your friend) DO OWE TAX TO THE UK
on your Canadian Pensions.


Article 17
Pensions and Annuities
1. Pensions arising in a Contracting State (CANADA) and paid to a resident
of the other Contracting State (Great Britain) who is the beneficial owner
thereof shall be taxable only in that other State (Great Britain).

2. Annuities arising in a Contracting State (CANADA) and paid to a resident
of the other Contracting State (GREAT BRITAIN) may be taxed in that other
State (GREAT BRITAIN). However, such annuities may also be taxed in the
Contracting State in which they arise and according to the laws of that
State, but if the recipient is the beneficial owner of the annuities the tax
so charged shall not exceed 10 per cent of the portion thereof that is
subject to tax in that State. (Should be 10% withholding paid to CANADA).

3. For the purposes of this Convention, the term "pension" includes any
payment under a superannuation, pension or retirement plan, Armed Forces
retirement pay, war veterans pensions and allowances, and any payment under
a sickness, accident or disability plan, as well as any payment made under
the social security legislation in a Contracting State, but does not include
any payment under a superannuation, pension or retirement plan in settlement
of all future entitlements under such a plan or any payment under an
income-averaging annuity contract.

4. For the purposes of this Convention, the term "annuity" means a stated
sum payable periodically at stated times during life or during a specified
or ascertainable period of time under an obligation to make the payments in
return for adequate and full consideration in money or money's worth, does
not include a pension or any payment under a superannuation, pension or
retirement plan in settlement of all future entitlements under such a plan
or any payment under an income-averaging annuity contract.

5. Notwithstanding any other provision of this Convention, alimony and
similar payments arising in a Contracting State and paid to a resident of
the other Contracting State who is the beneficial owner thereof shall be
taxable only in that other State.


2. The interest is taxed 10% in Canada first and then added to your UK
income as stated in Article 11(2) of the Treaty as follows:

Article 11
1. Interest arising in a Contracting State (CANADA) and paid to a resident
of the other Contracting State may be taxed in that other State (UK).

2. However, such interest may be taxed in the Contracting State (CANADA) in
which it arises, and according to the law of that State; but if the
recipient is the beneficial owner of the interest, the tax so charged (BY
CANADA) shall not exceed 10 per cent of the gross amount of the interest.

3. Notwithstanding the provisions of paragraph 2 of this Article:

(a) interest arising in the United Kingdom and paid to a resident of Canada
shall be taxable only in Canada if it is paid in respect of a loan made,
guaranteed or insured, or a credit extended, guaranteed or insured by the
Export Development Corporation; and

(b) interest arising in Canada and paid to a resident of the United Kingdom
shall be taxable only in the United Kingdom if it is paid in respect of a
loan made, guaranteed or insured, or a credit extended, guaranteed or
insured by the United Kingdom Export Credits Guarantee Department.

4. (a) Notwithstanding the provisions of paragraph 2 of this Article,
interest arising in Canada and paid in respect of a bond, debenture or other
similar obligation of the Government of Canada or of a political subdivision
or local authority thereof shall, provided that the interest is beneficially
owned by a resident of the United Kingdom, be taxable only in the United

(b) Notwithstanding the provisions of Article 29 Canada may, on or before
the thirtieth day of June in any calendar year give to the United Kingdom
notice of termination of this paragraph and in such event this paragraph
shall cease to have effect in respect of interest paid on obligations issued
after 31 December of the calendar year in which the notice is given.

5. The term "interest" as used in this Article means income from debt-claims
of every kind, whether or not secured by mortgage, and whether or not
carrying a right to participate in the debtor's profits, and in particular,
income from government securities and income from bonds or debentures,
including premiums and prizes attaching to bonds or debentures, as well as
income assimilated to income from money lent by the taxation law of the
State in which the income arises. However, the term "interest" does not
include income dealt with in Article 10.

6. The provisions of paragraphs 1, 2 and 4 of this Article shall not apply
if the recipient of the interest, being a resident of a Contracting State,
carries on business in the other Contracting State in which the interest
arises through a permanent establishment situated therein, or performs in
that other State professional services from a fixed base situated therein,
and the debt-claim in respect of which the interest is paid is effectively
connected with such permanent establishment or fixed base. In such a case,
the provisions of Article 7 or Article 14, as the case may be, shall apply.

7. Interest shall be deemed to arise in a Contracting State when the payer
is that State itself, a political subdivision, a local authority or a
resident of that State. Where, however, the person paying the interest,
whether he is a resident of a Contracting State or not, has in a Contracting
State a permanent establishment in connection with which the indebtedness on
which the interest is paid was incurred, and that interest is borne by that
permanent establishment, then such interest shall be deemed to arise in the
Contracting State in which the permanent establishment is situated.

8. Where, owing to a special relationship between the payer and the person
deriving the interest or between both of them and some other person, the
amount of interest paid exceeds for whatever reason the amount which would
have been paid in the absence of such relationship, the provisions of this
Article shall apply only to the last-mentioned amount. In that case, the
excess part of the payments shall remain taxable according to the law of
each Contracting State, due regard being had to the other provisions of this

9. Any provision in the law of a Contracting State relating only to interest
paid to a non-resident company shall not operate so as to require such
interest paid to a company which is a resident of the other Contracting
State to be treated as a distribution of the company paying such interest.
The preceding sentence shall not apply to interest paid to a company which
is a resident of a Contracting State in which more than 50 per cent of the
voting power is controlled, directly or indirectly, by a person or persons
resident in the other Contracting State.

10. The provisions of paragraph 2 of this Article shall not apply to
interest where the beneficial owner of the interest-

(a) does not bear tax in respect thereof in Canada; and

(b) sells (or makes a contract to sell) the holding from which the interest
is derived within three months of the date on which such beneficial owner
acquired that holding.
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TD F 90-22.1


In previous correspondence you have said that any account on which you have signing authority (be it a bank account or a church bake sale fund) has to be reported on TD F 90-22.1. ("Once the total of all accounts you have signing authority over including RRSP's, Trust accounts, bank accounts, credit union accounts, whole life insurance policies, universal life insurance policies, secured visa or MasterCard accounts, or the Girl Guide, Boy Scout, Church, or office Xmas party pool) has ever exceeded $10,000 during a year, EVERY ACCOUNT you have signing authority over, MUST HAVE ITS OWN T DF 90-22.1.") However, I am confused by your answer to the question below. You write, "If you are simply signing cheques for the Church Bazaar or a Girl Guide Troop or the company payroll cheques where you work, you would not have a financial interest." Am I to infer from this response that one only needs to file TD F 90-22.1 if one has a "financial interest" in the account (i.e., "if it is your money or half your money or ten percent your money" in the account)?

I run a research centre at xxxxxxxxxxxxxx xxxxxxxxxxxxx xxxxxxx xxxxxxxxxxx, which is funded by an annual grant from a federal government department. I have signing authority on the account, which is managed by the Business Office. As Director of the Centre I am authorized to approve the release of those funds, by the Organization, for payment related to activities specified in the contract with the government department. As Director I am ultimately responsible for how that money is spent, and I do in fact account for our spending in a detailed annual report. The Business Office acts as the Centre's accountant, making sure that expenses are properly documented and consistent with the terms of the contract, and meeting all Treasury Board rules, and then cuts the cheques from the University's bank account. Question: do I have a financial interest in that account? Do I report it on TD F 90-22.1?

Many thanks for your response.

david ingram replies:

The form is quite clear I think. You fill out the TD F 90-22.1 form for "any" account you have signing authority over.

Question 26 asks if you have a financial interest. If yes, stop. If "NO", then you answer questions 27 to 35 which tells the US Treasury whose account it "is".

Without a doubt, it is a complete invasion of privacy with tremendous penalties for failure to comply.

To put it bluntly, it leaves you open to intimidation and threat. All you need is another person in your organization to know that you sign an account and are an American. They can write a letter to Treasury and you are "caught". Easier to send in the form and not worry about offending Ralph or Joyce. Theoretically, you could report fourteen accounts and be penalized fro not reporting the one at work. -

However, in my 43 years in this business, at this point, I have NEVER seen anyone penalized for not reporting a company account where they are an employee of someone else's company or organization.


At 03:32 AM 2/9/2007, you wrote:

Subject: TD F 90-22.1
Expert: [email protected]
Date: Thursday February 08, 2007
Time: 01:25 PM -0500


Can you please explain the purpose of this form and tell me if I need to
file it. I am US citizen married to a Canadian and living in Canada for
several years. I am filing married separately in US. I was finally added to
the checking account, savings account, and GIC's in 2006. So I now have
signature authority, but what does "financial interest in" mean exactly?
Since we were married,have I had financial interest in his accounts prior to
my name being added? Since my US interest amount was over $1500 this year
and I had to fill out a Schedule B, I just noticed this. I hate this tax
stuff - do they just make it difficult on purpose??

david ingram replies:

If the combined total of all the accounts you have signing authority over
exceeds $10,000 US, you MUST file a TDF form for each and every account. I
suggest that you do a whole form for each account rather than filling out
page two which allows for three accounts per page. That was, if you wish to
change an account it is much easier than pulling one out of the middle of
page 2.

The penalty for getting caught if you do not fill them in is up to $500,000
PLUS 5 years in jail.

I knew one person personally who has done jail time over these and know of
one other 68 year old lady who was given 6 months and a $60,000 fine but the
jail time was suspended and she did not go to jail. Another 105 year old
lady received a $10,000 fine.

You must fill them in.

A financial interest occurs if it is your money or half your money or ten
percent your money.

If you are simply signing cheques for the Church Bazaar or a Girl Guide
Troup of the company payroll cheques where you work, you would not have a
financial interest.

Depending upon your agreement with your husband, you may or may not have a
financial interest in the accounts. If you are simply capable of signing on
the accounts and they are still "his", you do not have a financial interest
while he is alive and the marriage is in good standing.

If, on the other hand, he specifically put your name on as a joint tenant
with right of survivorship, than you likely do have a financial interest.

The purpose of the TDF is to stop US citizens from hiding money in foreign
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RRSP's - living and working in the U.S

I'm a Canadian citizen, living and working in the U.S. I have a green card. I have money sitting in a Canada Trust RRSP that I opened over 10 years ago. I have not been able to do anything with it, as the rules don't allow me to even put it into a mutual fund account, as I don't live in Canada. I keep hearing about the possibility about rolling this account into a U.S. retirement fund, but the law never seems to change.........

Have you any information that might help me??

Thank you,


david ingram replies;

This just surfaced and the following info can help you.

There is no rollover but your account can be handled internally by Canadians.

i.e Dan Walkow and / or Darrell Thompson can both look after your account in the US.


I can't believe everyone of the hundreds of thousands of Canadians who retire in the sunny US go through all this. And that all the local brokers and financial advisors are so clueless.

My ex employer and the Canadian expatriates working there still think I'm creating.a tempest in a teacup, and that an RRSP is treated like a 401K by the IRS. They all deserve what they get at this point.

Is what I told my Canadian broker in the email below correct?

This is really a nightmare. I have six RRSP GIC accounts in Canada, they total about $550,000 Canadian. My first priority is to have an income stream from them by January 2008, my secondary priority is to have an inheritance from them to leave my two daughters who both live in NYC. I need about 5% payout to maintain my standard of living. I will take care of my American wife after I go to the big motorcycle ride in the sky from my US pensions and US investments.

I have no idea what to do with these RRSP's. Everybody I speak to is either clueless, or has something to sell and thus a hidden agenda. I 'm scared to put them in mutuals in an RRIF because I can't manage that from here, and I think annuities are a ripoff.

I know that if I deregister them and bring them down here over a period of say 5 years I can still keep my federal tax below 15% so the bite will still fall within the foreign tax credit applicable to what Canada witholds. And then if I have them in mutuals in the USA, whatever I leave to my kids will be tax free, the US government forgives capital gains on a mutual fund left as an inheritance, and I will fall well below the $2000,000 exemption on estate tax. Unless the democrats change the laws and screw it all up.

I believe there is some special deal that one can deregister all their RRSP's when leaving Canada at a lower tax rate; a one shot deal. I left in 1991 on a temporary visa, without the intention of staying in the USA permanently. My employer later petitioned for a permanent visa, and I eventually became a US citizen. But because this developed slowly, I never filed a "leaving Canada tax return". I didn't have anything to declare anyway. I did file tax returns for 1991 in both Canada and the US, both Federals, state, and provincial, I guess that qualifies as a leaving Canada return". Does this lower deregistration rate apply 17 years later, and anyway, will the IRS consider it all income in one year?

Right now I'm thinking of just rolling it all into RRIF's and taking whatever interest payout a GIC in an RRIF will provide, and declaring the disbursements as ordinary income on my US taxes.

Do you have any advice on which is the best course through this minefield?


Letter to Canadian Broker
To: Sent: Monday, February 05, 2007 4:47 PM
Subject: Re: U S TAX


If we had some bread we could have a bread and cheese sandwich if we had some cheese.

You have been doing your home work. However the forms you sent were used for a few years, but have been out of date since 2003. They were superseded for the tax year 2004 and on by form #8891. I attach a copy. Please note the IRS term "beneficiary" means someone who would be obligated to pay tax on the income if he did not declare for an exemption on #8891. "Beneficiary" does NOT mean one is already taking disbursements, it just mean one is entitled to them one day. Exactly like a beneficiary in an insurance policy, one is a beneficiary even if one has not yet become entitled to a payout. In short; if one owns an RRSP or an RRIF, one is a "beneficiary".

It doesn't matter whether it is in an RRSP or an RRIF, all gains on any RRSP ot RRIF account, ever since the moment I became a US resident in 1991, are taxable the minute I deregister the account. If I do this I have to go back and figure for all the years, and declare the income on the basis of:
- Interest
- Capital gain
- Dividends paid
That's why I like GIC's; it would be impossible to backtrack mutual funds. I still would have to pay capital gains tax on my GIC's, the value the accounts have increased since 1991 due to exchange rate is a capital gain in the USA because I report in US dollars.

The amount that I had in the plans before I moved to the States is not taxable even though it is in pre-tax Canadian dollars: only the gain since moving to the United States is taxable in the United Sates.

This is not the end of it. The US federal Government (the IRS) allows one to defer taxation by filing form #8891. Almost all states go along with this filing of form #8891, and therefore allow deferment of the state tax as well. EXCEPT CALIFORNIA. Anyone living in California who owns a Canadian RRSP or an RRIF has to calculate the the internal income and declare it on his California State taxes and pay the tax every year. If he doesn't he is commiting a crime.

Now if I just take quarterly income from the RRSP or RRIF, whether in the form of an annuity or a regular disbursement, then I could declare all that disbursement as income in the USA and pay tax on it all every year, and defer taxation on the balance left in the accounts. See form #8891. I have not yet found out how to take disbursements and do this so I do not pay US tax on the amounts I had in the account when I came to the USA. This may all be academic, because my tax rate in the USA will be about 15% federaL, and 6% State, so the tax rate is lower than in Canada. However Canada will withhold something like 15% or 20% or 25% (I'm not sure, please tell me) and the US will give me a tax credit up to what I would have paid in the USA on this income. So if Canada withholds 20%, there is no point in my turning the world upside down to show that I do not need to pay that much in the US, I might as well declare it all here and take the tax credit which will still be under the amount Canada has already withheld.

This is a nightmare.

from Canadian Broker to US client

----- Original Message -----
From: xxxxxxxxxxx
To: xxxxxxxxxxxxxxxxxxxxxx
Sent: Monday, February 05, 2007 3:24 PM
Subject: U S TAX










david ingram replies;

You are not the only person frustrated by the system but there are a couple of solutions that I know of.

And make s real note to yourself that from 2000 to 2005, you likely did 3 or 4 times better by leaving them in Canada. Just think of the flat market in US securities and the high market for Candian securities for those five years and then add in a 35% positive exchange rate for Canada to US and thank youir lucky stars that you did not move them in the summer of 2000 or 2001. Remember, that for that period, most Canadian Financial advisors were telling theuir Canadian Client to get foreign content and putting them into US Dollar accounts and US securities.

There are two people I know of who are specializing in your situation. They are:

Dan Walkow of Seabank Securities who is running a seminar on this topic at 7 PM in San Diego today (see and one in Casa Grande Arizona on Feb 12,. Therefore, today, he is not available at his office in Surrey, BC but I am sure that they would take a message or put you through to him.

How to Contact Us
Seabank Capital Management Inc.

Suite 301 - 1959 152nd Street

White Rock, British Columbia, CANADA V4A 9E3

Toll-Free 1-866-541-9952 (United States & Canada)

Telephone: 604-541-9952

Fax: 604-542-5642

General inquires: [email protected]

Dan Walkow, Managing Director: [email protected]

AJ Sull, Portfolio Manager: [email protected]

Paul Bains, Associate Portfolio Manager: [email protected]

Johanna Van Poele, Manager of Business Development: [email protected] Anthony Darcovich, Executive Assistant: [email protected]

Johann Van Poele is with him in the USA at the moment but she likes old North American iron and if you sent her pictures of your cars, I know you would get supberb service.

SeaBank is a boutique operation that can look after any Canadian or American Investor no matter what they own or where it is located or where they are located if it is a security. They do not deal with Real Estate. You can see more at their website at The nice part is that everyone involved is involved int he US Canada Cross Border operations.


The second and closer to you is Darrell Thompson of Blackmont Securities in Toronto. Blackmont is the old Yorkton Securities and I can still remember the Yorkton Director telling me that he had spent some $5,000,000 getting his firm registered to be able to look after your kind of business. Unfortunately, very few of the brokers participated in the cross-border business.

Darrell Thompson is one that did and you can get hold of him in Toronto at 866 775-7704 - If that number does not work in your area, try (416) 874-8007


I had great hopes for TD Waterhouse. TD Waterhouse started down that lane and even had a dozen of their brokers like Shaun Rickerby (another lover of old cars) who were getting going and then TD stopped the process. And, if you were living in any other country but the US, I would recommend Shaun as well.(604) 482-5188 because he understands the non-resident rules, etc.

Both Dan and Darrell CAN deal with any movement in your RRSP or RRIF. You are not limited to GICs because of the cross border rules because these two brokers have made it a point to be registered in the US States and Canadian Provinces that they need to be registered in to deal with you.

However, if I were you, I would leave the money in Canada and withdraw from a good securities (maybe a mutual fund) account in a systematic withdrawal as a RRIF. The Canadian withholding tax will be 15% and you will not need to file a Canadian return.

You will have to calculate the earnings portion of this blended payment to report as taxable income on your US return and you get to claim the 15% tax paid to Canda as a foreign tax credit on US form 1116.

And, If you move to Texas or Washington or Nevada or Florida or Alaska, you can avoid a state tax return.

If you were totally frustrated, you could just withdraw the whole shebang and pay Canada 25% of the gross as tax f a one time payment to Canada. You would then add all the increase in value since you moved to the US to your US return and claim a pro-rata amount of the 25% tax.

Hope this helps - now I have to figure out how to make it into a mass mailing.

There is another group in Calgary that I could rcommend if you do not want to manage the account. Guardian will manage a US residents account but - officially - they decide what goes into the mix.
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I am a Canadian who bought a time share in Las Vegas. What happens when and if I sell it?
david ingram replies:

I was involved with Resort Condominium International back in 1972 when Adventures West in Whistler was the first member in Canada. And then again in the St Ives project at the Shuswap in 1976.

And, although I have known of Blue Mountain Resort and Myrtle Beach Time Shares to sell at a profit, the usual situation is that you will lose money on the deal.

Because it is real estate based, you (and your spouse if two owners) will need to file a 1040NR tax return to report the sale. There could / would be a $1,000+ fine for not filing the return.

Nevada, Florida, Texas, etc. does not have a state return but if you were selling in Palm Springs, Phoenix, Myrtle Beach, Hawaii, Colorado or Vermont you would be filing a state return as well.

Selling is a problem because the Time Share selling organizations charge an arm and a leg.

Consider something like where some $15,000,000 a month of timeshares are resold or rented.

Watch out for a situation where you sell it to a friend in Canada however. You have still made a sale and it must be reported on the US 1040NR even though no money changes hands in the US. This still applies where you get NO CASH because some friend or relative just takes over your payments.