Problem in investing in a Canadian Mutual Fund Trust - dan Walkow - Seabank Capital -
QUESTION:
This is too specific to get a detailed answer without a fee. In fact, it was rejected first. However, I spotted it as I was going to bed and always like to give an answer to what starts off as unsurmountable problem. In my opinion, the broker is dealing with fire if he or she sells to a Canadian corporation with non-resident owners as well.
What you need is a different broker, one who is licensed IN CANADA to deal with you in the USA.
I would NOT buy the stock in US registered plan. If it is worth buying, buy it outside the tax shelter and take advantage of lower capital gains tax rates and use the 15% Canadian tax deducted on the dividends as a personal tax credit on form 1116.
I am a U.S. resident with my own one-person North Carolina corporation. I have all of my investment money inside my one-person comany's defined benefit pension trust here in the U.S. (it is like a self-directed I.R.A. although it is not exactly that). I want to invest some of that money in one particular Canadian commodities trading fund which is structured in B.C. as a "mutual fund trust". I have no problem doing any of this on the U.S. side. I have all of the U.S. side under control. The problem is that this particular Canadian commodities trading mutual fund trust oprator will not take my investment because I am in the U.S. They are not registered with the U.S. CFTC or S.E.C. and are afraid of want to run afoul of U.S. securities regulators by dealing with U.S. residents (namely my U.S. pension plan trust). However, they would be willing to accept the investment from a Canadian corporation if I set one up. Could I incorporate a Canadian corporation to buy and hold the units, without too severe adverse tax consequences? The only reason to create this Candian corporation would be to convince the mutual fund trust operator that he was not dealing with a U.S. person for U.S. securities-regulation purposes. It would be owned by my U.S. defined benefit pension plan trust. In the U.S., my defined benefit pension plan trust pays no taxes at all, so I would hate to pay Canadian taxes and withholding taxes along the way. Another way of approaching this problem would be to create some entity that would be considered a non-U.S. resident for securities regulation purposes but a U.S. entity for taxation purposes. That might be the ideal solution. Maybe an offshore corporation would be an option. Or maybe I am missing some option..... Thanks for any comments! ------------------------david ingram replies:
This is too specific to get a detailed answer without a fee. In fact, it was rejected first. However, I spotted it as I was going to bed and always like to give an answer to what starts off as unsurmountable problem. In my opinion, the broker is dealing with fire if he or she sells to a Canadian corporation with non-resident owners as well.
What you need is a different broker, one who is licensed IN CANADA to deal with you in the USA.
I would NOT buy the stock in US registered plan. If it is worth buying, buy it outside the tax shelter and take advantage of lower capital gains tax rates and use the 15% Canadian tax deducted on the dividends as a personal tax credit on form 1116.
------------------------------------------ Don Walkow of Seabank Capital Management in Surrey, BC is one Canadian who can help you with the process while you are still in the United States. His licensing allows him to deal with 401(K) plans, IRA's, RRSP's and straight securities in any state in the US - He is one of two people I know of who can do this. - His North American telephone number is 1-800-541-9952 and you can find out more at www.seabankcapital.com. Darrell Thompson of Blackmont Securities is the other person and is located in Toronto. His phone number is 866-775-7704 If you are in Canada and in BC or Ontario in particular, Fred Snyder, host of "Its Your Money" every Sunday Morning from 9:00 to 10:30 AM Vancouver Time can also look after you but can NOT talk to you if you are in the US. (999 out of 1,000 other Representatives in Canada can NOT talk to you either). You can listen to this Canadian Program (I am a regular guest - used to be the first co-host) live at www.600am.com
On January 29, 2008, David
Ingram wrote:
It is very unlikely that blind or unexpected email to me will be answered. I receive anywhere from 100 to 700 unsolicited emails a day and usually answer anywhere from 2 to 20 if they are not from existing clients. Existing clients are advised to put their 'name and PAYING CUSTOMER' in the subject line and get answered first. I also refuse to be a slave to email and do not look at it every day and have never ever looked at it when I am out of town. e bankruptcy expert US Canada Canadian American Mexican Income Tax service and help
However, I regularly search for the words"PAYING
CUSTOMER" and always answer them first if they did not get spammed out.
For the last two weeks, I have just found out that my own email notes
to myself have been spammed out and as an example, as I wrote this on
Dec 25, 2007 since June 16th, my 'spammed out' box has 47,941 unread
messages, my deleted box has 16645 I have actually looked at and
deleted and I have actually answered 1234 email questions for clients
and strangers without sending a bill. I have also put aside 847
messages that I am maybe going to try and answer because they look
interesting. -e bankruptcy expert US Canada Canadian American
Mexican Income Tax service and help
Calls welcomed from 10 AM to 9 PM 7 days a week Vancouver (LA) time - (please do not fax or phone outside of those hours as this is a home office) expert US Canada Canadian American Mexican Income Tax service help.
$1,700 would be for two people with income from two countries
Catch - up returns for the US where we use the Canadian return as a guide for seven years at a time will be from $150 to $600.00 per year depending upon numbers of bank accounts, RRSP's, existence of rental houses, self employment, etc. Note that these returns tend to be informational rather than taxable. In fact, if there are children involved, we usually get refunds of $1,000 per child per year for 3 years. We have done several catch-ups where the client has received as much as $6,000 back for an $1,800 bill and one recently with 6 children is resulting in over $12,000 refund.
David Ingram expert income tax service and immigration help and preparation of US Canada Mexico non-resident and cross border returns with rental dividend wages self-employed and royalty foreign tax credits family estate trust trusts income tax convention treaty advice on bankruptcy
It is very unlikely that blind or unexpected email to me will be answered. I receive anywhere from 100 to 700 unsolicited emails a day and usually answer anywhere from 2 to 20 if they are not from existing clients. Existing clients are advised to put their 'name and PAYING CUSTOMER' in the subject line and get answered first. I also refuse to be a slave to email and do not look at it every day and have never ever looked at it when I am out of town. e bankruptcy expert US Canada Canadian American Mexican Income Tax service and help
Therefore, if an email is not answered in 24 to
48 hours, it is likely lost in space.
You can try and resend it but if important AND YOU TRULY WANT OR NEED
AN ANSWER from 'me', you will have to phone to make an appointment.
Gillian Bryan generally accepts appointment requests for me between
10:30 AM and 4:00 PM Monday to Friday VANCOUVER (Seattle, Portland, Los
Angeles) time at (604) 980-0321. david ingram expert
US Canada Canadian American Mexican Income Tax service and help.
david ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
david ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
Calls welcomed from 10 AM to 9 PM 7 days a week Vancouver (LA) time - (please do not fax or phone outside of those hours as this is a home office) expert US Canada Canadian American Mexican Income Tax service help.
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
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David Ingram
gives expert income tax & immigration help to non-resident
Americans & Canadians from New York to California to Mexico
family, estate, income trust trusts Cross border, dual citizen - out of
country investments are all handled with competence & authority.
Phone consultations are $450 for 15 minutes to 50
minutes (professional hour). Please note that GST is added if product
remains in Canada or is to be returned to Canada or a phone
consultation is in Canada. ($472.50 with GST if in Canada) expert US Canada Canadian American Mexican
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This is not intended to be definitive
but in general I am quoting $900 to $3,000 for a dual country tax
return.
$900 would be one T4 slip one W2 slip
one or two interest slips and you lived in one country only (but were
filing both countries) - no self employment or rentals or capital gains
- you did not move into or out of the country in this year.
$1,200 would be the same with one
rental
$1,300 would be the same with one
business no rental
$1,300 would be the minimum with a
move in or out of the country. These are complicated because of the
back and forth foreign tax credits. - The IRS says a foreign tax credit
takes 1 hour and 53 minutes.
$1,600 would be the minimum with a
rental or two in the country you do not live in or a rental and a
business and foreign tax credits no move in or out
$1,700 would be for two people with income from two countries
$3,000 would be all of the above and
you moved in and out of the country.
This is just a guideline for US /
Canadian returns
We will still prepare Canadian only
(lives in Canada, no US connection period) with two or three slips and
no capital gains, etc. for $200.00 up.
With a Rental for $400, two or three
rentals for $550 to $700 (i.e. $150 per rental) First year Rental -
plus $250.
A Business for $400 - Rental and
business likely $550 to $700
And an American only (lives in the US
with no Canadian income or filing period) with about the same things in
the same range with a little bit more if there is a state return.
Moving in or out of the country or
part year earnings in the US will ALWAYS be $900 and up.
TDF 90-22.1 forms are $50 for the
first and $25.00 each after that when part of a tax return.
8891 forms are generally $50.00 to
$100.00 each.
18 RRSPs would be $900.00 - (maybe
amalgamate a couple)
Capital gains *sales) are likely
$50.00 for the first and $20.00 each after that.
Catch - up returns for the US where we use the Canadian return as a guide for seven years at a time will be from $150 to $600.00 per year depending upon numbers of bank accounts, RRSP's, existence of rental houses, self employment, etc. Note that these returns tend to be informational rather than taxable. In fact, if there are children involved, we usually get refunds of $1,000 per child per year for 3 years. We have done several catch-ups where the client has received as much as $6,000 back for an $1,800 bill and one recently with 6 children is resulting in over $12,000 refund.
This is a
guideline not etched in stone. If you do
your own TDF-90 forms, it is to your advantage. However, if we put them
in the first year, the computer carries them forward beautifully.
This from "ask an income trusts tax service 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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