-----Original Message-----
Sent: Monday, January 02, 2006 9:37 AM
To: taxman at centa.com
Subject: Landed Residents but US Citizens
We are US immigrants to Canada with landed resident status.
We own three businesses and have been filing US and canadian
personal income tax returns.
We are in the process of selling one of the businesses (a
veterinary practice). Our Companies are structured under a
Numbered Limited Company.
Do we need to take into serious consideration any tax concerns as
we prepare to sell? Or is there some sort of agreement between
Canada and the US for transactions of this type?
Second question--I have been here much longer than my husband and
therefore have little or none Social Security or Medicare. Would
it be of any benefit to pay this up for the future?
Would you suggest an appointment?
-------------------------------------------------------
david ingram replies:
I attended Ontario Veterinary College to be a veterinarian in the
class of OVC-65. Did not graduate but had a lot of experience
with veterinary practices because my uncle, Keith Robson, had
more than 30 locations set up in Manitoba, Saskatchewan and
Alberta. In fact, everyone goofed and sent me to veterinary
college and I went because I did not recognize that Uncle Keith's
role was running his multi office practice rather than that of a
veterinarian. They should have sent me to Harvard or Western
Ontario for an MBA instead. As it was, I ended up running over
700 tax preparation offices in 30 states and 4 provinces. Seems
that you might have multi irons in multi fires as well.
It sounds to me like you have 4 Canadian Companies and I Trust,
nay hope that you have been filing your US 5471 and TDF forms.
Take a look at last year's US return and if it is correct there
should be a 5471 for each Canadian Corporation and a TDF-90 for
each Canadian Bank Account that you and your spouse have signing
authority over. If both of you have signing authority on one
account, you each need to file a TDF-90-22.1 for that account.
The penalties for not filing from 5471 (one each for each company
each year) is $10,000 for the first 90 days and $10,000 every 30
days after that for a max or $50,000 per company per year.
The penalties for not filing form TDF 90-22.1 is up to $500,000
PLUS 5 years in jail per person per account. The most I have
seen assessed here was $60,000.
The need to file a corporate 5471 with your personal US 1040
means that there are great tax concerns. For instance, you may
be claiming the Canadian $500,000 tax free sale and the IRS does
not recognize it. However, you have lowered / changed your price
in Canada so that the purchaser will buy shares instead of assets
so that you pay less tax and end up paying tax to the US on a
lower sale price. Not a good business decision.
As a resident of Canada, you can NOT pay into US Social Security
or Medicare unless you wander across the border to work. If you
do not have 40 quarters, it could be to your advantage to do so.
One of my lady clients is working as a cashier in a US gas
station just across the border to accomplish this.
I think that everyone in your position gets something from an
appointment with me. It's sort of like going to a dentist. Are
you happier when you are told you have 10 cavities or happier
when the doc says - nothing needs to be done. If I don;t find
something significant that should be changed, you can have
complete confidence in your present accountant(s). If I find
something, it will save you tax or penalty as a rule.
Again, this is a good question for SIRIUS RADIO tomorrow morning
but you can NOT phone in from Canada at this point.
listen to David Ingram Thursdays on Channel 114 Sirius Radio The
Good Life with Jesse Dylan Daily at 12 noon New York time - david
Ingram International Income Tax expert - real estate IRA's 401(K)
Thursday Jan 5, 2006 will be at 10 AM Vancouver time, 1 PM
Manhattan time.
You can listen live on Channel 114 of your Satellite Radio or
listen to the stream on www.lime.com. You have to have the
latest version of Real Player to listen live on the Internet. You
can get the latest version free by going to
http://www.real.com/playerplus/index.html?src=downloadr
After you are up to date, you can listen to the live program by
clicking on:
http://lime.com/more/Radio_Play/index.html
If you are in Canada and have a question to ask and want to email
it to me in advance, we will try and use it on the air and if
not, I will make a real effort to answer it by email.
But better would be a phone call if you live in the USA.
Yep, a live free phone call is available from anywhere in The
United States (not Canada yet) at 1-866-LIME-114 or
1-866-546-3114
Now, I do not have to tell you that if you want this service
available in the future, support now would be nice. Help me show
those Manhattan types that there is a real demand for a Canadian
to be answering US tax questions with particular emphasis on
those Cross-Border or out of country questions. Thousands of tax
consultants can answer a child tax credit but not many can deal
with foreign tax credits and earned income exemptions and a
foreign vacation home or foreign bank accounts or that foreign
pension you still have after an American works in Australia, or
Algeria or Spain or Canada.
------------------------------
David Ingram expert income tax help and preparation of US Canada
Mexico non-resident and cross border returns with rental dividend
wages self-employed and royalty foreign tax credits
David Ingram's US/Canada Services
US / Canada / Mexico tax, Immigration and working Visa
Specialists
US / Canada Real Estate Specialists
Home office at:
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
Calls welcomed from 10 AM to 10 PM 7 days a week (please do not
fax or phone outside of those hours as this is a home office)
email to taxman at centa.com
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 and the author and any and all non-contractual
duties are expressly denied. All readers should obtain formal
advice from a competent and appropriately qualified legal
practitioner or tax specialist for expert help, assistance,
preparation, or consultation in connection with personal or
business affairs such as at www.centa.com. If you forward this
message, this disclaimer must be included."
Be ALERT, the world needs more "lerts"
This from "ask an income tax and immigration expert" from
www.centa.com or www.jurock.com or www.featureweb.com. David
Ingram deals on a daily basis with expatriate tax returns with:
multi jurisdictional cross and trans border expatriate problems
for the United States, Canada, Mexico, Great Britain, United
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Immigration Tips, Income Tax Immigration Wizard Antarctica
Rwanda Guru Consultant Specialist Section 216(4) 216(1) NR6 NR-6
NR 6 Non-Resident Real Estate tax specialist expert preparer
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