Landed Immigrant

Dave,
> I am a US Citizen and Landed Immigrant of Canada. Do I have any legal or other restrictions for buying, selling, trading stocks, bonds, mutual funds, or having a broker on both sides of the border doing the same for me. I am getting mixed information from brokers on both sides and NEED an experts advice.
> xx
> ________________________________________________________
david ingram replies:

The restriction is NOT on you by government.

The restriction is on the people you are dealing with. They are restricted by the Securities Coimmissions and their licencing as to whom 'they' can sell to.

In other words, if you live in BC, an Ontario Securities broker or Mutual Fund salesman can NOT deal with you.

Some like Fred Snyder are licenced in BC and Ontario and can deal with you but even two provinces is rare.

When you are talking about BC - Arizona, or Ontario - Florida, you have a real problem.

The following older answers will likely help - Dan Walkow and Darrell Thompson HAVE gone to the effort to be able to deal with cross-border situations.

>
>
>
> QUESTION: 1. have been trying to find ethical investment firm to go with in Canada and can not seem to get any unbiased answers We live in Red Lake Ontario (landed immigrants), but are also US citizens
>
> 2. Is this Stansberry & Associates legit, as they seem to have many different opportunities claiming great returns
> Pinchot Retirement Plan, Master Limited Partnership, Market Index Target Term Security , Oakmark Select Funds
> Thanks greatly looking forward to your email
>
>
> ---------------------------------------------------------------------------
> david ingram replies:
> I have no good or bad knowledge about Stansbery and Associates. None of my clients deal with them to my knowledge.
>
> From looking at their website, they seem to be a newsletter operation as mucyh as anything. I have about 15 interviews with newsletter writers on gold (John Embry), oil, uranium (Martin Kafusa), silver (Sean Rahkimov) real estate (Ozzie Jurock), futures and commodities (Victor Adai), Resources in General (Elsworth Dickson, Publisher of Resource World) etc at www.howestreet.com - mostly in the third column.
>
>
> Two ethical people who specialize in selling securities, RRSPs, etc., to US citizens in Canada or Canadians in the US are:

Dan Walkow
Seabank Financial
White Rock
Local (604) 541-9952
L D (866) 541-9952
www.seabankcapital.com

AND

Mr Darrell Thompson
Blackmont Securities
Toronto
Local (416) 874-8007
LD (866) 775-7704
www.blackmont.com
__
These two individuals and their companies have gone to the effort to get themselves registered just about everywhere so they can deal with a Candian in Florida or California or Nevada, etc.
____________________________________

Note that because of their specialty, they tend to deal with accounts in excess of $200,000

However, both parties would welcome an exploratory call.

working in Seattle and being factual resident of Canada

QUESTION:

Hello Tax Experts
I am a Canadian going down from Vancouver to Seattle to work on an L1. I have been transfered to the company's head office.
I am also brining my wife with me whom I met on a cruise ship. She is xxxxxxxxx and has her Canadian immigration papers in process.
I have been told that to claim non residency would cancel my wife's application so our intention is to keep our residency status which I imagine would be easy as the visa is really only for 3 years anyway.
We will rent out our apartment via a management company but I'm wondering how much difference there would be in taxes by doing things this way. If I was making a nice round number like 100K per year US... is it easy to say what the difference would be remaining a resident vs becoming non-resident?
I was always told that if I was in a 30% bracket in the states and a 33% bracket in Canada, I would owe Canada 3% at the end of the year by remaining a Canadian resident.

Is that correct?

Thanks for any information you can give me!

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david ingram replies:

Without paying any attention to the rental or cost of living, as a resident, you would owe Canada $6,600 or so more if you earned $100,000 in Seattle and this was converted to $110,000 Caandian.

This assumes a full year of employment and that you earned all of the income and your wife earned nothing.

The advantage of being a factual resident is that you could avoid capital gains tax on your apartment.

RESP accounts in Canada when started by US citizens - THE BAD NEWS

THE BAD NEWS

RESP accounts in Canada when started by US citizenbs

A way back when, I specifically stated that these accounts require the preparation of a 3520 /3520A and then I heard (I hate rumours) that it would be satisfactory to write RESP on the top of an 8891 form instead and passed that info on to one person and one person only. (initials - S.O.) and then thought better of it.

Well, I have just got off the phone from Treasury's head office (where the 8891 was conceived and approved) and was told specifically that the RESP DOES require a 3520 to be filled out under current policy.

Frankly, the charge to do it properly is likely more than the RESP is worth and we are talking every year.

The worse part of the conversation was the admission that the Treasury department is not even officially sure that the RESP "is" a foreign trust under the legislation. However, they are working on it.

david ingram

Canadian rrsp for US immigrant

Hi David,

Will it be an advantage to leave your RRSP money if you are now an immigrant in the USA and will eventually become US citizen? I have 24,000 can. $ in RRSP and wonder whether to leave it there till my retirement age or pull it now and invest it in my US pension plan.

Please help.

____________________________________________________
david ingram replies:

No one can answer that!

It depends upon the future performance of the releative economies, exchange rates in the future and another hundred factors.

In general, most consultants suggest that deversication by investing in world economies is a good idea.

If I were you, I would keep the Canadian RRSP.

Just remember to fill in forms 8891 and TDF 90-22.1 each year as per the two questions at the bottom of Schedule B of your 1040.

Internet Business

QUESTION: Dear David,

I would appreciate so much if you can let me know the tax implications of my eBay business - I started a eBay business selling electronic products. I am a Canadian citizen living in Vancouver. I have arrangement with my suppliers in China to ship the sold items directly from China to my customers all over the world. I do not keep inventory myself nor do I import any products. All I do is to sell on eBay on my home computer. I'm the owner of the eBay account. The proceeds are in US dollars, and is deposited into my bank account in the US, and is used to pay my supplier and other expenses such as eBay fees.

What do I do about tax? Is it a good setup? Please help me!!!

Thank you so much!

Sincerely,

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david ingram replies:

Your business is based in Vancouver and must be reported on line 135 of your Canadian T1 income Tax return.

The next problem or question involves the US where you are not physically working but apparently have a bank account where all expenses are paid from and where all money is deposited.

I wonder if you have rented a mail box or office identification spot and have a US address on your cheques and account.

If so, the appearance of a fixed base may be enough for the IRS to try and tax you and if it is based in Washington State, trhe "STATE of WASHINGTON" might want to assess a business tax for the business done in Washington Statebut it would only apply to sales made to Washington state Addrresses.

A mail box is not usually thought of as a fixed base but it would be better to pre-empt the US authorities.

I believe you should file a US 1040NR with schedule C and claim exemption from any US income tax under Article XIV of the US / Caanda Income Tax Convention (Treaty). This gives the IRS the chance to see what is happening and challenge you now rather than later.

You would then file your Canadian return and fill in form 2124 and put the results on line 135 of your return.

Because you live in Canada, neither your US 1040NR or your Canadian T1 is due until June 15th.

If you need help, we would be glad to assist.

capital gain on sale of rental condo

QUESTION:

I've sold condo last month. It was rental property. Do I need to pay capital gain right now or when filling tax return
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david ingram replies:

You will need to calculate any recaptured depreciation and capital gains and put them on your return in April 2008 for the 2007 tax year.

ATTRIBUTION RULES 74.1

Thank you so much David.

If I get a cash gift from my husband and, some time later, I put this monely into a GIC, does it mean that the interest from that GIC should be atttibuted to my husband's tax return for the rest of our lives?...
Or is it that income/loss generated up to the time of giving the gift should be atrributed to the giver, but after the gift is given, it is the new owner who is resposible for taxes on newly generated interest?

(My question is specifically about cash gifts and bank interest.)

Many thanks
xxxx
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david ingram replies:

If your husband gave you $1,000 and you put in a drawer for twenty years and then took it out and put it in the Bank of Montreal and the B O M paid you $22.50 interest, the interest is taxable to your husband.

However, the next year, when you receive interest on the $22.50 interest, the interest paid on the interest is taxable to you .

Therefore, as time goes by, more and more of interest on the interest becomes taxable to you.

This also applies if you were not married when your husband gave you the money as the act clearly says "to a spouse or a person who has since become a spouse". In 43 years, I have only seen this application applied once in the case of a dentist who gave his receptionist some money and then married her ten years later after his wife died.

Selling Vacant lots in Nova Scotia - Steve Peters KPMG

My parents are US Citizens. In the 1960's they purchased land in Yarmouth, NS. They still own this vacant land. It has never been developed, built on or subdivided. They now wish to sell this vacant land. There are four lots, one of which is water front.

How do they go about this, I mean I know they list with a realtor, but once it is sold they have questions about capital gains etc. My father is 76 and my mother is 72. Are there any tax exemptions for seniors etc. The value at the time they purchased it (1965) is was valued at $600 it is now assessed for taxes at $7,000. They hope to sell it for $15,000-$20,000 (Canadian).

If they owe taxes, do they owe in both US and Canada. Don't our two countries have some sort of tax treaty so you don't get hit twice. Not sure. They are both on US social security with no other income. I went to the Canadian Tax Revenue site but got lost!

Any advice is appreciated.

Thank you,

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david ingram replies:

The amounts are so low that it is hard to believ that you can buy 4 lots with one on the water in Yarmounth for $20,000. Luinenburg is much more expensive.

However, there are some items that have to be brought to your attention.

1. Canada did NOT tax capital gains until Jan 1, 1972. There was a 'step-up' in value for that day.

2. Article XIII(9) of the US / Canada Tax treaty exempts a US resident from capital gains tax in Canada until Dec 31, 1984. therefore, your parents can theoretically exempt any profit to that date.

3. The US will tax from tax from day one in 1965 but allow a foreign tax credit on form 1116 for any tax paid to Canada.

SO!

When sold, they need to file form T2062 within 10 days to determine the withholding tax by Canada.

CANADA

"THEN", they need to file a Canadian Tax return with schedule 3 each to report their share of the profit from Jan 1, 1985 to the date of sale.

This tax will be about 25% of one/half of the profit./

"USA"

"THEN" They file their US tax return with Schedule D to report the profit and if there is US tax to pay, they will claim a foreign
tax credit on US form 1116.

If you are in Nova Scotia, Steve Peters at KPMG in Halifax is good at this.

If you are not in Nova Scotia, you might as well send it to us as you will go crazy trying to find anyone who truly understands the system and method.

Nonresident Australian business in Canada

Non-resident businesses

The revenue canada website talks about an non-resident business. How do you form such a business or how do you get deemed a non resident business? I am a resident of australia and am interested in doing business in canada.

thanks

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david ingram replies:

If you are a non-resident doing business in Canada, you are automatically a non-resident business.

You can operate as a proprietorship (simplest) or as a corporation.

If you are a proprietorship and do not maintain a fixed base in Canada, There is NO tax payable to Canada under Article XIV of the Australia / Canada Income Tax Convention. If you open an office or have a warehouse with employees, you ewoul dhave a fixed base and be taxable. In either case, you would need to file a Canadian return.

If you paid tax in case two, you would claim a foreign tax credit on your Austalian Tax Pack.

If your business is expected to gross over $30,000 per fiscal year in Canada, you would also have to register fro and collect GST of 6% on every sale. You might also need a provincial sales tax number and need to collect the provincial sales tax.

This is very basic, but you should get the idea.

E2 Visa / Texas / BC Cdn Assets / Wills and Estate Planning

Hello there!
>
> How are things in North Van.? We lived there for a year in 1978.
>
> Situation:
>
> We need some help / assistance / guidance
>
> We are in the USA in Texas since 1992 on E2 Visas. We are Canadian citizens. We own xxxxxxxxxxxxxx. a Texas ‘C’ corporation, and xxxxxxxxxxxxxxxxxx Inc. separately incorporated in Alberta. We file Canadian T1s as Alberta residents and US 1040s each year. CCRA ‘deemed’ us ‘dual residents for tax purposes. (I love CCRA and their ability to ‘deem’ things.)
>
> We own substantial assets (company, real estate, etc.) in Texas, and we own substantial assets in Canada (include condo and boat in BC). We don’t currently own any real estate in Alberta. We do maintain an address there. Texas is a community property state.
>
> We need help with Will(s) and estate planning. I am 57, my husband is 73.
>
> Is this your area of expertise? Can you recommend someone?
>
>
> ---------------------------------------
david ingram replies:

What you are looking for is what I do although i would refer you to a lawyer for final wills.

Under article IV of the US / Canda Tax Treaty as described, you woul dnot owe any tax to Canada on your US holdings even if deemed a factual resident of Canada.

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Dan Walkow - Darrell Thompson - Investing in both US / Canada - US Citizen/Landed Immigrant

working in Seattle and being factual resident of Canada

RESP accounts in Canada when started by US citizens - THE BAD NEWS

Canadian rrsp for US immigrant

Internet Business

capital gain on sale of rental condo

ATTRIBUTION RULES 74.1

Selling Vacant lots in Nova Scotia - Steve Peters KPMG

Nonresident Australian business in Canada

E2 Visa / Texas / BC Cdn Assets / Wills and Estate Planning

Monday 06-Dec

Sunday 05-Dec

Friday 15-Oct

Wednesday 15-Sep

Tuesday 14-Sep