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QUESTION:
I am a Canadian working in USA on a TN Visa I expect to be in the states =
for
about 12 months which would qualify me as a Resident Alien for tax =
purposes.
I understand this means I am treated similarly to a US citzen but with =
less
rights for tax purposes. My Wife is reamining behind back in Canada =
where we
share assets of about $800,000 CDN. If I was to die while a I am a =
resident
alien what would the US estate taxes be for my wife in Canada and =
conversly
if she were to die what would be the effect on me? We have made no moves =
at
this time to protect ourselves from the US tax system
Thanks
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david ingram replies:
In this situation, Article IV of the US Canada Tax Convention would make =
you a resident of Canada for world wide tax purposes. You are taxable =
in the US first on the money earned in the US and in Canada second. This =
is the second question answered and you have sent two more for a total =
of four.
There is no US estate tax in the situation you describe. US estate taxes =
only apply to estates over $1,000,000 US per individual. =20
I suggest that you need a phone consultation. My charge for this would =
be $350 for an hour.
In the meantime, pay attention to the details of Article IV which I am =
reproducing here:
=20
Article IV of the US Canada Income Tax Convention (1980) with amending =
protocols reads as follows:
Article IV - Fiscal Domicile - (it is the same number in most treaties) =
For the purposes of this Convention, the term "resident of a Contracting =
State" means any person who, under the law of that State, is liable to =
taxation therein by reason of that person's domicile, residence, =
citizenship, place of management, place of incorporation or any other =
criterion of a similar nature, but in the case of an estate or trust, =
only to the extent that income derived by the estate or trust is liable =
to tax in that State, either in its hands or in the hands of its =
beneficiaries. For the purposes of this paragraph, a person who is not a =
resident of Canada under this paragraph and who is a United States =
citizen or alien admitted to the United States for permanent residence =
(a "green card" holder) is a resident of the United States only if the =
individual has a substantial presence, permanent home or habitual abode =
in the United states and that individual's personal and economic =
relations are closer to the United states than any other third State. =
The term "resident" of a Contracting State is understood to include:=20
(a) the Government of that State or a political subdivision or local =
authority thereof or any agency or instrumentality of any such =
government, subdivision or authority, and=20
(b) (i) A trust, organization or other arrangement that is operated =
exclusively to administer or provide pension, retirement or employee =
benefits, and=20
(ii) A not-for-profit organization that was constituted in that =
State, and that is, by reason of its nature as such, generally exempt =
from income taxation in that State.=20
2. Where by reason of the provisions of paragraph 1 an individual is a =
resident of both Contracting States, then his status shall be determined =
as follows:=20
(a) he shall be deemed to be a resident of the Contracting State in =
which he has a permanent home available to him. If he has a permanent =
home available to him in both Contracting States, he shall be deemed to =
be a resident of the Contracting State with which his personal and =
economic relations are closer (centre of vital interests);=20
(b) if the Contracting State in which he has his centre of vital =
interests cannot be determined, or if he has not a permanent home =
available to him in either Contracting State, he shall be deemed to be a =
resident of the Contracting State in which he has an habitual abode;=20
(c) if he has an habitual abode in both Contracting States or in neither =
of them, he shall be deemed to be a resident of the Contracting State of =
which he is a national;=20
(d) if he is a national of both Contracting States or of neither of =
them, the competent authorities of the Contracting States shall settle =
the question by mutual agreement.
David Ingram's US/Canada Services
US/Canada/Mexico Tax Immigration & working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Calls accepted from 10 AM to 10 PM 7 days a week
Res (604) 980-3578 Cell (604) 657-8451
Bus (604) 980-0321=20
[email protected]
www.centa.com www.david-ingram.com
Disclaimer: This question has been answered without detailed =
information or consultation and is to be regarded only as general =
comment. Nothing in this message is or should be construed as advice =
in any particular circumstances. No contract exists between the reader & =
the author and any and all non-contractual duties are expressly denied. =
All readers should obtain formal advice from a competent financial, or =
real estate planner or advisor & appropriately qualified legal =
practitioner, tax or immigration specialist in connection with personal =
or business affairs such as at www.centa.com. If you forward this =
message, this disclaimer must be included."
This from ask an income tax immigration planning and bankruptcy expert =
consultant guru or preparer from www.centa.com or www.jurock.com or =
www.featureweb.com. Canadian David Ingram deals daily with tax returns =
dealing with expatriate:
multi jurisdictional cross and trans border expatriate gambling refunds =
for the United States, Canada, Mexico, Great Britain, the United =
Kingdom, Kuwait, Dubai, Saudi Arabia, South Africa, Thailand, =
Indonesia, Egypt, Antarctica, Japan, China, New Zealand, France, =
Germany, Spain, Italy, Russia, Georgia, Brazil, Peru, Ecuador, Bolivia, =
Scotland, Ireland, Hawaii, Florida, Montana, Morocco, Israel, Iraq, =
Iran, India, Pakistan, Afghanistan, Mali, Bangkok, Greenland, Iceland, =
Cuba, Bahamas, Bermuda, Barbados, St Vincent, Grenada,, Virgin Islands, =
US, UK, GB, American and Canadian and Mexican and any of the 43 states =
with state tax returns, etc.
income tax wizard wizzard guru advisor advisors experts specialist =
specialists consultants taxmen taxman tax woman planner planning =
preparer of Alaska, Alabama, Arkansas, Arizona,=20
California, Colorado, Connecticut, =20
Delaware, District of Columbia, Florida,=20
Garland, Georgia, Hawaii, Idaho, Illinois,
Indiana, Iowa, Kansas, Kentucky,=20
Louisiana, Maine, Maryland, =20
Massachusetts, Michigan, Minnesota, =20
Mississippi, Missouri, Montana, Nebraska, =20
Nevada, New Hampshire, New Jersey,=20
New Mexico,New York, North Carolina, =20
North Dakota, Ohio, Oklahoma, Oregon.=20
Paris, Rome, Sydney, Australia Hilton
Pennsylvania, Rhode Island, Rockwall,=20
South Carolina, South Dakota, Tennessee, =20
Texas, Utah, Vermont, Virginia,=20
West Virginia, Wisconsin, Wyoming,=20
British Columbia, Alberta, Saskatchewan,=20
Manitoba, Ontario, Quebec City,=20
New Brunswick, Prince Edward Island,=20
Nova Scotia, Newfoundland, Yukon and=20
Northwest and Nunavit Territories, =20
Mount Vernon, Eumenclaw, Coos Bay=20
and Dallas Houston Rockwall Garland=20
Texas Taxman and Tax Guru and wizzard=20
wizard - Your name has been added to our email list because of an =
enquiry we have received, we may not answer your question but=20
another similar question will be as we lump them.
You may find more answers at www.centa.com
If the number of messages is too many for you or the US / Canada =
Taxation and Immigration information is not of interest, simply reply =
with a remove request.
David Ingram of the CEN-TA REALTY Group
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
(604) 980-0321 - Fax 913-9123 [email protected]
www.centa.com www.david-ingram.com
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