Sent: Sunday, October 16, 2005 7:01 PM
To: taxman at centa.com
Subject: RRSP & real estate
Hello,
I am a Canadian citizen (now dual U.S.) also living in the U.S.
for the past six years (with my husband, also dual).
When I left Canada, I left a few RRSP accounts which I do not
contribute to and understand I cannot change as long as I am a
non-resident of Canada. My hope is that eventually, tax laws
will change and eventually I will be able to make changes if I
wish, while in the U.S.; or, by the time I retire, I may be back
in Canada; or may cash them in when I have no other source of
income.
Meanwhile, I live here and contribute to an IRA.
My question ( a long shot):
Is there any provision for purchasing real estate in Canada
with the RRSP funds? Keeping it as an investment for future
retirement. (There is a rather complicated possibility to own a
real estate IRA.)
Second question (another long shot):
My husband and I are trying to sell a piece of vacant land here
in the U.S. There is a tax provision where if we purchase
another piece of real estate within 90 days (or six months, I
have to check the law), we can defer the capital gains tax on the
sale. Do you have any idea if this provision were to apply if we
sold a piece of land here and used the money to purchase a piece
of land in Canada?
Thank you.
Lisa Jensen
ljensenadobera at earthlink.net
---------------------------------------------------------------
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david ingram replies:
1. You can not use the RRSP funds to purchase real estate
directly,. However, there are several mutual funds which own
real estate. You can buy real estate mutual fund shares with
your RRSP money. Depending upon the state you live in, the rules
for non-residents dealing with their RRSP accounts have eased a
bit. Shaun Rickerby of TD Waterhouse is a good person to talk to
about this as the repeated Q& A following # 2 suggests.
2. You are talking about a section 1031 exchange. This
works if the properties are in the same country. So you could
sell a property in Canada and buy another one in Canada under
Section 1031 but you can not sell one in the US and buy in
Canada. You could up to 1986 or so but they closed that down,
The following is the answer to a previous question.
Sent: Tuesday, October 04, 2005 11:29 AM
To: taxman at centa.com
Subject: non resident tax withholdings
I have an interesting situation, which I have been trying to
resolve with no success. Perhaps you can give me an approach to
try.
I am a Canadian citizen with RRSP and RESP holdings with the
Royal Bank and TD Waterhouse. Some of my accounts include
stocks, which occasionally pay dividends. These are reinvested.
I have noticed that Non Resident tax is withheld on these
accounts.
Now, I know that this should not be happening, as we have a tax
treaty with the US and the income in these accounts is not taxed
in Canada until it is withdrawn. Effectively, this is double
taxation, as I don’t receive a T5 for the income showing the tax
withholding.
What to do, what to do? I have enquired, but am being told by
TD Waterhouse that it is not their responsibility, the tax was
withheld by the agent and they have simply reported it. My
position is that they should be notifying these agents that this
is a non taxable account.
Can you suggest a way to get action?
Thanks
============================================
david ingram replies:
Move your account!
This is a perennial problem which I see with RBC Dominion
Securities the most. The problem is that most securities people
just do not care and even if they did care it is too much trouble
with no immediate cash reward. Of course, losing a big account
should be incentive enough but lots of people just cannot be
bothered. Now that i have said that, I have to confess that I
lost a very good account myself last year where RBC was involved
and the RBC rep was extremely professional. I had virtually
ignored one client (initials MC) at the time I was going
through a divorce and was just not responding myself in time. (A
good reason but not really an excuse - i did not recognize that
this particularly lady needed more hand holding and I have never
been a good hand holder.)
However, without a doubt, The best TD
Waterhouse person to talk to about a Canadian Account when you
live in
the USA is Shaun Rickerby at (604) 482-5188.
I can tell you that without any hesitation, you should transfer
your Waterhouse account to his tender care.
His advice from the inside can help you deal with the Royal
bank as well.
Shaun is one of about 12 Canadian Stockbrokers who has taken
the trouble to get himself licenced in most of the relevant US
states. He is a truly unique individual who I recommend highly
to any US resident with Canadian RRSP accounts and stock
holdings.
I have been recommending Shaun for four years now and have
never had a complaint and likely received a dozen thank you
calls. I have never met him, never had a cup of coffee with him
and never received a commission, spiff, etc until last Saturday
when i used a couple of his BC Lion's tickets to see the Lions
play the Saskatchewan Roughriders.
It was a good game but in the absolute last minute of the game
when the roughriders scored an impossible touchdown, I twisted on
the stairs and managed to take a header on those cement hard
stadium stairs and can still hardly move -- So thanks Shaun,
look after this lady if she calls.
On another note, it is amazing to see how Bobby Ackles has
changed Vancouver's attitude to the Lion's in three short years.
He ha made them a household name again with flags flying from
cars, etc. Of course, his son Scott has been a great marketing
help as well.
.
David
Answers to this and other similar questions can be obtained
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Every Sunday at 9:00 AM on 600AM in Vancouver, I, david ingram
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Those outside of the Lower Mainland will be able to listen on
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