My_question_is: Applicable to both US and Canada
Subject: 401k Rollover for Canadian Citizen & Resident with Green
Card
Expert: taxman at centa.com
Date: Monday July 10, 2006
Time: 04:54 PM -0700
QUESTION:
Hi,
For the past five years my wife and I both lived in the US and worked at
Microsoft. While in the US we each had 401k plans with our employer. We’ve
recently moved back to Canada. It’s possible that we’ll move back to the US
at some point in the future so we’ve both kept our green cards and applied
for and received reentry permits. Although our employer sponsored 401k plan
is fine we’ve been considering rolling them over into an IRA so that we can
have more choices for what to invest in. We still have a US address that we
can use in Washington State. Are there any tax considerations we should be
aware of before we rollover our 401ks over? Does it matter which type of
401k we choose?
Many thanks,
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david ingram replies:
The big tax consequence of your actions is that you must continue to file US
returns as long as you keep your green cards active - Goto www.centa.com
and read the Oct 1995 newsletter in the top left hand box to see what you
need to do. There is also a new form 8891 to report the internal earnings
of your Canadian RRSP accounts and of course, you must file the T DF 90-22.1
forms for any Canadian accounts you have if the total of everything
(including RRSP's) is over $10,000
You can roll your 401(K) accounts over into an IRA without any penalties
whatsoever. However, many US IRA companies are telling their Canadian
clients that they can not handle their account any more so you want to
consider a large company such as TD Waterhouse or Blackmont Securities to
help you.
Shaun Rickerby at TD WATERHOUSE is a good person TO deal with if you are in
Vancouver to get a TD recommendation from. You can get him at 604-482-5188.
Darrell Thompson is at Blackmont in Toronto and is able to look after people
on both sides of the border because of his licensing. Blackmont is the old
Yorkton Securities.
Darrell Thompson
Investment Advisor/Registered Representative
Blackmont Capital Inc./Blackmont Capital Corp.
Telephone: (416) 874-8007
Toll Free: (866) 775-7704
Fax: (416) 864-3638
Email: dthompson at blackmont.com
------------------------------------------------
david ingram replies:
David Ingram's US / Canada Services
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Cell (604) 657-8451 -
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Calls welcomed from 10 AM to 10 PM 7 days a week Vancouver (LA) time -
(please do not fax or phone outside of those hours as this is a home office)
email to taxman at centa.com <mailto:taxman at centa.com>
www.centa.com <http://www.centa.com/> www.david-ingram.com
<http://www.david-ingram.com/>
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