QUESTION:
Dear Mr. Ingram,
I am a Canadian citizen with a Green Card, living in Arizona with my husband, a U.S. citizen.
I have a federally-regulated locked-in RRSP with TD Canada Trust in Toronto and would like to take advantage of the new regulations that would allow unlocking the funds after age 55. I don't want to cash in the RRSP now, I just want to unlock the plan to make it more flexible. The way it is now, I cannot change anything about the way it's invested. All I can do is convert it to an annuity, which I don't want to do now.
The bank tells me that the only way that I can change anything at all with this RRSP is in person, at any TD Canada Trust branch in Canada. No proxy, no fax, no phone, no email, no letter, notarized or otherwise.
Can you suggest any way that I can unlock this RRSP without actually traveling to Canada? I would be perfectly happy to move the money to another financial institution or leave it with TD Canada Trust. Eventually I will want to use the funds but for right now, I want to keep the money invested, just not locked in per federal regulations.
I would welcome any advice. Thank you.
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david ingram replies:
The problem is that that TD Canada Trust is not licenced to deal with you in the United States.
You need to deal with someone like Dan Walkow who left his position as a vice-president at RBC Dominion Securities to start Seabank Capital, a boutique financial services office set up to manage and handle cross border investing fro US citizens in Canada and Canadians with Canadian accounts int he US.
You can find him at
Dan Walkow
Seabank Financial
White Rock
Local (604) 541-9952
L D (866) 541-9952
www.seabankcapital.com)
You can transfer the locked in plan to Seabank Capital and then manage it as you want to because he is licenced to deal with you in the United states.
TS did start the process about 8 years ago and a dozen of their people went to the effort to licence themselves to look after you.
However, the hierarchy changed their minds and TD can no longer look after you other than to hold the account in an unchanged manner. That is why they will only deal with you at a Canadian branch because it is against US Security rules for them to talk to you in the US about buying or selling or moving stocks within your Locked in plan in most states.
Dan can look after you.
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SUGGESTED PRICE GUIDELINES - Aug 5, 2008
david ingram's US / Canada Services
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pert US Canada Canadian American Mexican Income Tax service and help.
David Ingram gives expert income tax service & 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.
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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. However, if you have a stack of 1099, or T3 or T4A or T5 or K1 reporting forms, expect to pay an average of $10.00 each with up to $50.00 for a K1 or T5013 or T5008 or T101 --- Income trusts with amounts in box 42 are an even larger problem and will be more expensive. - i.e. 20 information slips will be at least $350.00
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.
Email and Faxed information is convenient for the sender but very time consuming and hard to keep track of when they come in multiple files. As of May 1, 2008, we will charge or be charging a surcharge for information that comes in more than two files. It can take us a valuable hour or more to try and put together the file when someone sends 10 emails or 15 attachments, etc. We had one return with over 50 faxes and emails for instance.
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.
--IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, please be advised that any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used or relied upon, and cannot be used or relied upon, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.--
-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 or www.garygauvin.com. If you forward this message, this disclaimer must be included." -
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