RRSP/LIRA and US business

My_question_is: Applicable to both US and Canada
Subject:        RRSP/LIRA and US business interest
Expert:         taxman at centa.com
Date:           Monday October 23, 2006
Time:           11:14 PM -0400
QUESTION:
I'm a Canadian citizen working in US on a TN visa. I have the
following questions and I hope you can direct me to the right
place for information. Any help is appreciated.
1.    I have capital loss when I filled out the T1243. Is it true
that I can carry the loss forward infinitely?
2.    I believed I sent all required forms to CRA when I left
Canada. I know I have to file the US form 8891 for RRSP. But I
thought this is a form for tax deferment, then how come I have to
report interest income and dividends in my RRSP account on form
1040 (as a beneficiary)? In addition, it seems like US recognizes
RRSP and RRIF, what about LIRA? Now, do I need to report my RRSP
and LIRA accounts on the US form TD90-22.11?
3.    A few of my friends (US citizens) and I we are thinking of
opening a rental property business in US. Is it better to form a
LLC or corporation (S or C) for this kind of business? Which
company structure offers a better tax scheme? I know that I can't
receive employment income from the company other than my
'sponsor', but can I receive business income? Moreover, given
that I'm only in US on TV visa, do I have the legal rights to own
part of a business? I tried to look up information on websites of
IRS/Homeland Security etc and I just couldn't find anything
useful on this matter. One of the partners is a H1B holder, is he
in a similar situation as mine?
Thanks a million for your help.
--------------------------------
david ingram replies:
1.      Yes
2.    The 8891 is poorly designed.  You should not have to report
the interest / dividends, etc on schedule B if you are filling
out form 8891.
My solution is to put the profit on line 10.  In the explanation
area, I write "A combination of internal earnings, change in
value and the devaluation of the US dollar versus the Canadian
Dollar has resulted in a paper profit of"    $xxx.xx
Report the LIRA on form 8891 and TDF-90
3.    You and the H1B visa holder can own any number of US
businesses but you can NOT do any services for those businesses
other than writing cheques and hiring people.   Whatever you do,
do not personally fire anyone (that would be taking a job away
from an American).  If it is necessary to fire someone, hire your
US lawyer to perform the task.
I am not going to comment on the type of ownership you should
have. In my opinion a TN and H1B visa holder should not have a
subchapter S corp because everyone must be a resident of the US
to keep it alive and if either of you lost your job, the
Subchapter S would technically be non-existent at that point and
convert to a C corporation.
However, be advised that if you go into the rental business you
can NOT personally
paint the property
clean the property
repair the property
collect rent
or perform any other service dealing with the property without
risking deportation.
You CAN buy it and Hire local people to perform all these
functions.
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