Dear David,   Ok, I think you've convinced me I should keep the townhouse and remortgage.  So I was wondering if you know a good accountant that could give me some direction on how to use this asset to best advantage considering my overseas situation.  I think I might need someone with more specialist training like yourself.   If you have any suggestions, I'd greatly appreciate it.   Say hi to Gillian for me.   Warm regards,  

---

david ingram replies:

Good move!  Keep the apartment for your future benefit. THAT WAY, IF YOU EVER RETURN TO CANANDA, YOU HAVE A PLACE TO MOVE INTO AT TODAY'S PRICE. 

With regard to an accountant, I thought that was what we did.

However, others in the international system that I know  and recommend are mentioned in the following older Q & A from last September. They are all US / Canda however, and I can't say that I know anyone else who deals with Canada - Australia situations.

Older Q & A's follow
--------------------------------------------------------------------- Hello,
You have been referred to me by a fellow Canadian living in Georgia
My family moved here in July 2004.
We have filed for income tax in 2004 with half/half between two countries
Presently filing for 2005.
We have RRSP in Canada, as well as some investments,
A small  business in  xxxxxxxxxxx (< 20,000 / year income) which we will not likely continue to operate for long. I am wondering what your firm offers in the way of assistance?
- complete income tax returns for States side
- offer advice on tax strategies for US side
- help develop long strategies.  (should RRSP be left in Canada etc)

Any information that you can provide on this would be appreciated.
Thanks,

------------------------------------------------------- david ingram replies:   I am happy to look after you.  That is what we do although I do have to tell you that our expertise is Country to Country and not necessarily state to state.   I just (for instance) found out that we do not have to file a Pennsylvania return when someone works in Pennsylvania and lives in Maryland.  43 years and I did not know that.   I did have offices in 30 states at one time but not Pennsylvania and Maryland.   Your 2004 returns will have been the most difficult.   You r  Canadian return should have had a form T1161 and likely T1243 and T1244 filed with it to look after departure tax.  I am assuming there would be a departure tax because of the investments and business property you have left in Canada.   Your US return should either have included your Canadian Income or have been a "dual status" 1040 return plus have included a 1040NR Dual Status Statement.   Since you were in the US from July, the operation of the resort property should have been included on your US return and any tax paid to Canada claimed on form 1116.   ---------------------------------------   Your 2005 returns should be a 1040 plus a  XXXXXXXXXX state return with schedule C to report the resort and an 1116 to claim credit for the Canadian taxes.   In my opinion, you should have the same person prepare the US and Canadian returns.   The following older Q & A sort of states my position -----------------------------------------------------------------------------
 Hi – I came across your fine website. I’m looking for similar services in Montreal, QC and wondered if you could recommend someone out here.  Regards,

 R -------

 -----------------------------------------------------------------------------------------------------

david ingram replies:

I have no recommendation for Montreal.  My old office in Ottawa had a marvellous US/Canada Tax consultant, Gary Gauvin,  but he has moved to Texas and I no longer have any ownership or anything else to do with the Ottawa office which bears my name.  If you type - income tax expert - into Google, Gary and I usually come up in the top three or four. (www.garygauvin.com)

Steve Peters with KPMG in Halifax knows his stuff.  (902) 492-6011

Brad Howland in Victoria is good.  (250) 598-6258


Steve Katz in Vancouver is really good with pension matters. (604) 732-1515


In Toronto, Kevin Nightingale is one of the best that exists.  The National Post's Jonathon Chevreau regularly recognizes Kevin and I in his columns.

The following from an older Q & A sort of states my position

------------------------------------------

Sent: Tuesday, January 03, 2006 6:02 AM
To: [email protected]
Subject: accountant in Toronto


Hello-
A friend of mine suggested that I contact you. I am an American who
moved to Canada in 2005 and am looking for an accountant in Toronto
who can help me with my U.S. and Canadian individual tax returns, and
who can provide me with advice about what to do with my 403(b)
retirement account. Thank you for your help.
-XXXXXXXXXXXXXXXXX
=====================================================
david ingram replies:

I will start off by saying that you should mail or courier it to us as half
of our clients do.

However, although I have never met him, Kevyn Nightingale and I have been
quoted in many articles in the National Post.

Kevyn Nightingale,
Suite 302 - 5001 Yonge Street
North York, Ontario, M2N 6P6
Tel: 416-733-9595 / Fax: 416-733-4725

And it was a good question.  I just looked at his fee structure and think I
will raise mine.

QUESTION:

Is it difficult to reside in Canada if you are an American citizen?  Can you have a dual citizenship?  I want to know about the health care rules for such a person.
thank you ----------------------------------------------------------------
david ingram replies;

It is substantially easier to immigrate to Canada from the US than from Canada to the US.  However, you still have to either qualify on your own  under a self-assessing point system (simialr to the system proposed and rejected in June by the US Senate),  get hired by a Canadian Company and they get a working visa for you, invest substantial sums of money $400,000 in a business as a rule for five years, OR marry a Canadian who sponsors you.

To do it yourself, answer the following:

 http://www.cic.gc.ca/english/skilled/assess/index.html  - This is the self-assessment test for an individual to determine his or her
eligibility to immigrate to Canada without being sponsored by a spouse.

You can find out about Canadian Healthcare here:  http://www.canadian-healthcare.org/

Then goto www.centa.com and read the October 1995 newsletter in the top left hand box and then read the US/Caanda Taxation section in the second box down on the right hand side to learn about the tax forms a US citizen in Canda has to file.

When you have done all of that, if you still have questions, I do phone consultations for $400 Cdn (about $380 US) as you will find in the following. �

QUESTION:  I am filling for my husband .MY I-130 application was Approved.my question
 is on my I-1864 affidavit of support
what is my sponsor household size? I'm only filling for my husband and in my last year 
tax return I claim my two nieces, ..how much should my income salary to bring my husband ? 
I relly need help .I hope you could understand my question.thank so much

---------------------------------------------------------------------------

david ingram replies:

As described, you would need  $25,812 for a family of four to match your Income Tax returns.  This amount can be found in form I-864P

If it was just you and your husband you would only need $17.112.  However, to explain the two nieces the year befoe and now there is just going to be two of you, you will need a good explanation about who will be responsible for the nieces in the future.

You will want to read this for the poverty guidelines
Form I-864-P - http://www.uscis.gov/files/form/I-864P.pdf - extra instructions at
http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f35e66f614176543f6d1a/?

QUESTION: Hi there,

I am a Canadian citizen. Currently, my husband is working overseas and we are living in Saudi Arabia as non-resident of Canada. Currently, I don't have any property in Canada.

I would like to purchase/invest in a business in US and would like to obtain an E-2 visa. What are the legal procedures and documentation that are required to obtain such visa? To apply for this, do I need to have a house in Canada or not.

I am looking forward to your quick response at your earliest convenience.

Sincerely,
---------------------------------------------------------------------------

david ingram replies:

An E2 visa is available to you whether you are in Canada or not. It depends upon your Nationality not where you are living.

If you go to www.centa.com, you will find (in the top left hand box) the January 1995 newsletter on E-2 Visa by Dennis Olsen, former US in Vancouver and an issuer of E2 visas until they were moved to Toronto.  In January 2006, the processing of E2s was opened up in Vancouver again and can be processed through the US Consulate in Vancouver if you are from BC and / or the Yukon.  All other Canadians must go through the Toronto Consulate -
find more at http://www.amcits.com/evisa.asp

Start by reading the January 2005 newsletter.  It will give you the rules and it is my impression that the approval is a little easier than this newsletter states now.

You can start the process and maybe make it a little cheaper by fillingout Form DS156 at  - https://evisaforms.state.gov/ds156.asp
Note that this is a fillable form

You wil also need DS156E  - http://www.state.gov/documents/organization/79963.pdf

You might need DS157  - http://www.state.gov/documents/organization/79964.pdf

You should fill in DS158 for your contact information and work history  - http://www.state.gov/documents/organization/79965.pdf

You can also see basic instructions at  http://evisaforms.state.gov/default.asp

Note that with an E-2, your husband can obtain a work authorization to work somewhere else as a rule.

There will be a couple of more forms but this will get you off to a good start and you can do it yourself.  However, be careful if you look for outside help.

If you need legal help, and are from BC or the Yukon specifically (or anywhere else in Canada),  I could suggest

David Anderrson LLB, AILA
200-1095 West Pender Street (same building as US Consulate)
Vancouver BC
V6E 2M6
(604) 608-0818 -

David just presented an excellent seminar in Vancouver on E-2 Visas and has an interesting proposal for an E-5 Visa which requires $500,000 US  but is a far superior visa than an E-2.

If you are from Quebec in particular,

Dan Cuppett, JD, AILA
57 Court Street
Plattsburgh, New York
USA 12901
(518) 566-6666
is an Immiogration attorney who specializes in Canadians (particularly those from Quebec) to the USA.

I would give you Dennis Olsen's(author of the Jan 1995 newsletter)  number as well but have not heard from him for the last while and when I did try and phone him on Thursday, could not find a phone number for him so he must be in the process of moving, or might even have retired, etc.

And note this well.  All your documentation for Toronto MUST be in the format which you can find at: http://toronto.usconsulate.gov/content/visas/E-28_TI.pdf

If it is not in this format, Toronto will reject the whole application. 

Vancouver also has its own rules as in

U.S. CONSULATE GENERAL, VANCOUVER
1075 WEST PENDER STREET
VANCOUVER, BC V6E 2M6
Mandatory Formatting Instructions for Treaty Investor (E-2) Visa Submissions
Effective Date: 01 August 2006
Non-compliant submissions will be rejected as of: 01 September 2006
Effective immediately, the Consulate in Vancouver now requires all cases to be
submitted in the following format. The E Visa Unit will not accept noncompliant cases
for processing as of 01 September 2006.
All submissions must be organized into the sections below. Submissions must be bound
and the sections must be delineated by clear dividers with tabs that stick out from the
edges of the page. Divider pages without tabs are not acceptable. If there are more than
two documents under one of the numbered tabs, you must subdivide the numbered
sections into lettered subsections with tabs.
Your submissions must be organized in such a way that the reviewer can locate all of the
relevant facts to make an adjudication within 5-10 minutes.
Once your submission is prepared as indicated below, submit it to our office by mail or
courier. Our addresses for various types of shipments may be found at:
http://www.usconsulatevancouver.ca/content/content.asp?section=visas8document=evisa
#submitting
Required format and contents:
The cover page and application forms must be loose (unbound to the rest of the package)
and placed on top of the submission package.
Application Requirements (unbound underneath cover page and on top of the documents
brief in the following order):
1. All DS-156, 156E, and 157 forms, filled out using the electronic visa application
forms – link available on Toronto’s website (Please note: we require DS-157
forms for all applicants over the age of 16, without regard to age or gender);
primary contact email address must be placed in block 23 on the DS-156; be
certain to fill in EVERY block on all forms and sign and date; submit only signed
original forms.
2. 2X2 passport-style photograph on plain white background taken within the last
six months. One for each applicant. See photograph requirements on our website
for further details.
3. Certified check or international money order payable to the U.S. Consulate
General Vancouver in the amount of $100 US per applicant.
4. Dependents – provide copy of marriage certificate for spouse and copies of birth
certificates for all children under the age 0f 21. Staple these to the DS-156
applications of the dependents applicants.
5. Attached to DS-156 for each applicant, include a signed statement of the
applicant’s intentions regarding the temporary or permanent nature of their stay in
the United States.
E-2 Requirements:
You must organize the tabbed exhibits following the number/letter outline below. You
must submit all of the documents noted here, unless otherwise indicated.
1. Summary
a. Concise comprehensive brief of relevant facts
● Be brief, state exactly and precisely how the enterprise qualifies
● Do not waste space with lengthy citation of CFR or FAM texts
● Make specific reference to supporting documentation, for example:
“The Canadian parent company is owned 100% by the applicant.
See organizational documents showing the corporation is
authorized to issue 250 shares (tab 3C(i), relevant portion
highlighted), and the applicant’s stock subscription agreement and
share certificate for 250 shares (tab 3C(ii)).”
b. Comprehensive Index/Table of Contents

2. Nationality of the Individual Beneficiary
a. Photocopy of the passport biographic page for investor(s)/employee(s)
followed by copy for each dependent family member
b. Photocopy of landed immigrant card
3. Nationality of the Company/Evidence of Controlling Interest
If your company is an incorporated entity:
a. Chart of ownership of the enterprise
b. Articles of Incorporation and certificate of existence/registration from the
state/province in which the company is incorporated.
c. Ownership:
● If privately held by a small group of shareholders, submit i)
evidence of the total number of shares outstanding, and who holds
each, and ii) evidence of the treaty country nationality of the
owners of at least 50% of the outstanding stock –OR-
● If publicly traded, submit i) notarized statement from a duly
authorized corporate officer stating all of the stock exchanges on
which the company is traded, ii) the volume of stock traded on
each exchange (see 9 FAM 41.51 N3.2), and iii) recently published stock
quotations
● Please note, for either of the above, if the ownership is traced to
another corporate entity (such as a holding or parent company
rather than an individual), you must also trace the ownership of the
holding company (ies) all the way back to the beneficial individual
owners
-OR- if your company is a partnership, Joint Venture, LLC, or similar:
a. Partnership or Joint Venture Agreement
b. Shares/stock certificates indicating total partnership units issued and
outstanding, and to whom they are issued
c. Please note, for either of the above, if the ownership is traced to another
corporate entity (such as a holding or parent company rather than an
individual), you must also trace the ownership of the holding company
(ies) all the way back to the beneficial individual owners
-OR- if your company is a sole proprietorship:
a. Business Registration
b. Proof of ownership of business assets (real property, etc.)
4. Source of Investment
a. Detailed statement by applicant explaining how funds used in the
investment were acquired or accumulated
b. Debit and credit services for personal and/or business account withdrawals
c. Documentation demonstrating how funds were acquired or accumulated:
● Transactions showing payment of sold property or business (proof
of property ownership and promissory notes) and rental income
(lease agreements); -AND/OR-
● Last three years of personal tax returns; -AND/OR-
● Statement from individual providing money to investor as a gift
5. Evidence of Investment
For an existing enterprise:
a. Purchase agreement
b. Proof of financing and funds transfer:
i. Copies of canceled checks or wire transfers from investor for all
deposits, partial-payments or transactions paid in full
ii. All loan, promissory or mortgage documents AND security
agreement; AND, copies of canceled checks or wire transfer
receipts from investor demonstrating consistent payment of
financial obligations. A letter from the financer stating all
payments are current may also be accepted
iii. Escrow agreement, escrow account statement in the U.S., escrow
receipt, if applicable
-OR- for a new enterprise:
a. Inventory listing: shipment invoices of inventory, equipment or business
related property
b. Receipts for inventory purchases
c. Canceled checks or official payment receipts for expenditures
d. Canceled check for first month’s rent or full annual advance rent payment
e. Lease agreement
f. Purchase orders
g. Improvement expenses
h. Initial business account statements
6. Marginality
a. U.S. corporate tax returns
b. Latest audited financial statement or non-review statement
c. Payroll register
d. W2 and W4 tax forms
e. Business plan (including pro forma financials for the first five year of
operations)
7. Real and Operating Commercial Enterprise
a. Occupational license, business license or business permits
b. Business transaction records, current/commercial account statements or
invoices from suppliers
c. Advertising leaflets, business brochures or promotional literature
8. If the applicant is an employee of the U.S. enterprise (executive/managerial;
and supervisory/essential skills):
a. Letter from Canadian company providing specific information on the
applicant and the reasons for his/her assignment to the U.S. The letter
must explain the employee’s role in the U.S. company (job title and
duties), the applicant’s executive or supervisory responsibilities or, if not a
supervisor, his/her specialist role, the level of education and knowledge
required by the employee’s position, his/her employment experience,
progression of promotion or high level training or special qualifications
and the reasons why a U.S. citizen or legal permanent resident cannot fill
the position (if the position is not managerial or supervisory)
b. Evidence of E-2 company owner’s nationality and immigration status in
the U.S.
c. Organizational chart showing current staffing pattern at U.S. company
d. Applicant’s complete resume

You can see that there is a lot to do including a business plan (we can help here) to show that the enterprise will be a success.

Hope this helps -  when you need tax help with all this, you know where to turn.

QUESTION:

Dear experts:
I am currently holding a TN visa working for a US employer. I have my family ties to Canada but I reside in the States for more than 183 days/year. Should I file as US resident or Canadan resident for the Tax purpose? In each case, what kind of tax forms or schedules I have to look at?
Thanks _____________________________________________________________________________
david ingram replies

If you are applying for an H1B visa and intend to get a green card and your family is not moving unitl the resident alien cards come through, you should be filing as a US resident and not paying tax in Canada.  If you have a house, it should be put in your wife's name only.  You would file a US joint return with your wife and claim your children as dependents.

If you are not intending to stay in the US and are still spending a lot of time in Canada, you wouold file as a Canadian resident and claim a foreign tax credit for the taxes, FICA and Medicare taxes you pay to the US after filing your US 1040.

There is an in between position where you might be a factual resident of Canda where you reprot your US income to Canada but deduct it then on line 256 under Article IV of the US Caanda Income Tax Convention. In this case you would be a tax resident of the US and file a joint US return with your wife.

You need to sit down in person or by phone with someone who really understands it. �

Hi David,

Will appreciate your advice on the situation bellow:

My mom-in-law is a Canadian citizen, has worked in Canada for 10 years then moved to USA and has just completed her 20th year of working in the US. She is going back to Canada and plans to stay there for the rest of her life. She’ll be getting pension from USA SSS and Missouri State. Is she entitled to Canada pension too?  Is it an advantage for here tax-wise moving back to Canada?

Thanks a lot for your help.


-----------------------------------------------------------------------
david ingram replies:

After age 60, she is entitled to a Canada Pension Plan based upon the 10 years.

Then, at age 65, she will be elibible for an Old Age pension based upon the number of years she is/was in Canada after age18 / 40 x's the max pension.

She will be paying more tax in Canada because Canada  taxes 85% of the US Social Security from the first dollar without the US SS exemption. �

QUESTION:

I am a US Perm resident (CDN citizen), looking to buy a vacation property in Canada. Can I deduct on my US taxes the land transfer tax and other property taxes from Ontario on my US tax return? (assuming I am itemizing). I have read IRS publications and it was as clear as mud.

Thanks !

------------------------------------------------------------------------
david ingram replies:

Absolutely yes! You can itemize these expenses on US schedule A whether the vacation property is in France, the Cayman Islands, Australia or Canada or any other country.

However, be careful if you decide to rent it out. As a non-resident of Canada you have to get involved with NR6, NR4, 1159 and T776 forms for Canda and then you have to put the same figures on US fomrs Schedule  E and 1116.. 

QUESTION:

Hi,
I purchased a condo in BC, Canada, last April and after 8 month transfered the property to my parents as I was told by my lowyer that if the transfer is done after more than six month I will be excepts for property transfer tax.

Now I am billed by Ministry of small buisness with the full tax amount and to be approved for an excemption, they are asking for a proof that my parenst actually resided in this property at least six month before the transfer.

Unfortunatly although my parents reside ther, but all the bills are under my name as I am the one managing them.


Just to note that I do own my own property. And my parents are first time home buyers.

My question is that what is the exact act for the tax excepmtion transfer that can apply to us here? Does it required the property to be occupied by the transferee 6 moth prior to the transfer?

If so, do you have any solution that can help me here.

Thanks for your help in advance,

------------------------------------------
david ingram replies:

I am not a BC property transfer tax specialist although I have been involved in enough.

I have no idea what the six month rule your lawyer is describing is about. 

As described in your question, you owe the PPT because you did not reside in the property for 12 months after purchase.

At any time, you should have been able to give it to your parents without their paying the PTT if you did not rent it out to others after purchase. This would apply whether they were first time purchasers or not.

If you rented it ou, they would have to be first time purchasers and the property had to be under about $350,000 - the rate changed to $375,000 in Feb 2007.

To be First time Purchasers:

* they can NOT have ever owned another property anywhere in the world.
* They must be Permanent Residents of Canada
* there must be a mortgage on he property for at least 70% of the value and it cannot be back to you for instance.
* they must fill in form   FIN269   at http://www.rev.gov.bc.ca/rpt/ptt/FormsandGuides/0269Sample.pdf

Nothing in your question indicates to me that 'you' would be exempt from PTT If you just bought the unit as a gift for your parents ..

Perhaps, what is being thought of is that when it was bought in your name, it was always your parents and that you were just a trustee.  In that case, you would be filling in the FIN269 as their trustee and getting affidavits or something showing that they were the residents. Surely, neighbours or someone can testify that they lived there.  They would have their BC medical, driver's licences, library cards to show as evidence as well.

The tax people are very specific about paperwork as well.  In my own case 5 years ago, I was in the middle of a $5,000,000 bankruptcy and a divorce at the same time.  Even though we KNEW who was to get the house, the trustee seized teh house from me (absolutley no reason to at the time) and then my now ex wife Jose Rodgers had to pay PPT on the house to get it back from the trustee.  Totally unfair, unreasonable and silly but if it is done in the wrong order, you are toast.

And to be fair, when I got the house back from my ex wife in the divorce, there was no PPT.

Two other thoughts.  If you bought this house for parents who =were not Permanent residents of Canada and they became permanent residents with 12 months, they (or anyone else) has 18 months from the time the property was originally transferred to apply for the Firt Time exemption. �

QUESTION:

I am a US citizen and landed in Canada (21 years), my sister (US citizen, living in US) and I are partnering in a real estate investment company (LLC). Is there any concerns I should be aware of as we start the paperwork.  My husband (Canadian citizen) is financially concerned.    PS:  Is there someone near the Fort Erie/Buffalo border who specializes in this type of stuff?  Thank you!
  ------------------------------------------------------------
david ingram replies:

It is only paperwork. 

You will have to look after your LLC in the US first and pay tax to the US on any profits.  Then report the money again (likely on line 122) on your Canadian return.  If you have a loss, report it as a loss.  If there is a profit, the figure also goes on line 433 of your Canadian Schedule 1. Any tax paid on your 1040 and any tax paid to a state then are converted to Canadian dollars and that combined  figure goes on line 431 of your Schedule 1 to calculate the foreign tax credit.

Your bigger problems are likely:

1.   You should be preparing a US 1040 return each year to report your world income to the US.

2.   You should read carefully the bottom two questions on schedule B

3.   If you have Canadian Accounts with more than $10,000 combined, you have to fill out forms TFD 90-22.1 (minimum penalty for failure to file is $10,000 if they catch you first.  Maximum fine is $500,000 PLUS 5 years in jail

4,   If you have a foreign trust in Canada, you have to file form 8891 for each RRSP.  failure to file is a penalty of 35% of the amount in the RRSP PLUS 5% per year for each year not reported.


GOTO www.centa.com and read the Entering the USA section in the second box down on the right hand side.

Then read the Oct 95 newsletter in the top left hand box - this explains the special responsibilities of a US citizen living in Canada.

If you want to know about dual citizenship, read the Oct 93 newsletter. �