Re the transfer of Canadian Money to the U.S.:
I have a life insurance policy I bought when I lived in Canada in
the early 80's. I've been paying premiums on it ever
since,
even though my wife and I moved back to the States in the late
80's. I am a U.S. citizen and my wife is dual. When I pass
on,
the insurance pay-off will be sent to my wife through either a
cheque (straight from the insurance Co) or a bank transfer which would be
faster. Will the sum be reported
as it is substantially more than $10,000? I assume there
are no taxes in either countries on insurance pay-outs.
Are there any other issues I need to address regarding
this?
Thanks for your answers.
--------------------------------------------------------------------
DAVID INGRAM REPLIES:
Any cross border transaction of over $10,000 US or Canadian MUST / should be reported by someone. In the case mentioned, the Life insurance company would report to FINCEN in Canada that they had sent the money across the border to your wife. When she deposited the cheque in a US financial institutuin, that institution would report the 'over $10,000' deposit from a foreign source.
In the meantime, if the life insurance policy has a cash value of over $10,000 or it plus other acounts you and your wife might still have in Canada total over $10,000 US, you shoul dbe filling in forms TDF 90-22.1 (see the bottom two questions on schedule B of your 1040) Be advised that any US resident with foreign bank or other financial accounts is required to file schedule B and answer the two questions on the bottom). If the life insurance policy is a term policy with no cash value, it does not count.
However, failure to file a required T DF 90-22.1 form has a minimum US penalty of $10,000 and a maximum penalty of $500,000 plus five years in jail.
----------------------------------------------------------
DAVID INGRAM REPLIES:
Any cross border transaction of over $10,000 US or Canadian MUST / should be reported by someone. In the case mentioned, the Life insurance company would report to FINCEN in Canada that they had sent the money across the border to your wife. When she deposited the cheque in a US financial institutuin, that institution would report the 'over $10,000' deposit from a foreign source.
In the meantime, if the life insurance policy has a cash value of over $10,000 or it plus other acounts you and your wife might still have in Canada total over $10,000 US, you shoul dbe filling in forms TDF 90-22.1 (see the bottom two questions on schedule B of your 1040) Be advised that any US resident with foreign bank or other financial accounts is required to file schedule B and answer the two questions on the bottom). If the life insurance policy is a term policy with no cash value, it does not count.
However, failure to file a required T DF 90-22.1 form has a minimum US penalty of $10,000 and a maximum penalty of $500,000 plus five years in jail.
----------------------------------------------------------
On Sep 17, 2007, at 12:22 AM, US / Canada Income Tax Help -
CEN-TAPEDE wrote:
------------------------------------------
I just saw a question you answered about a Canadian living in the
US as a permanent resident selling a home and wanting to transfer the money to a
US bank. (
http://www.david-ingram.com/CEN-TAPEDE/archive/Week-of-Mon-20061009/002904.html) I'm
in the same situation, except I want to keep most of the money in Canada. You
said, below, that the banks will notify the treasury on amounts over $10,000. Is
this $10,000 at any one time, or per calendar year?
What I want to do is bring enough money to pay off my US credit
cards. Through several bank withdrawals and cheque deposits I've already put
about $9600 Canadian into my US bank (not at the same time) to pay bills. Do I
need to wait until next year to bring more in, or is it okay to continue
doing this? I would need maybe another $11,000 to pay everything off here.
Thanks!
david ingram replies:
If you have transferred $9.600 so far and have paid it out already, there is no problem. If you are transferring smaller amounts because you are trying to amass an amount over $10,000 for a single purpose, then you have to report the transfer of more than $10,000 AND the financial institution you have transferred the money to in the USA should be reporting the transaction as well. In fact making several transfers for a total of $12,000 could make you look like a suspicous person whereas one $15,000 transfer would never raise a suspicious person report, especially if the money was then paid out to credit card companies.
The rules for reporting take place for both countries when there is a transfer (or series of transfers) of more than $10,000.
If you do it as a bank transfer, you do not need to worry. The bank will do the reporting for you.
If you take cash out in Caanda and take it across the border yourself, YOU have to do the reporting to both countries.
This older series of questions will help
This last question just gave me an idea for a new
question:
What if I bring say $15 000 US into Canada but I do
it at several trips and
every time I carry less then $10 000 (3000-5000)? Any forms to fill or
report? Thanks.
every time I carry less then $10 000 (3000-5000)? Any forms to fill or
report? Thanks.
PxXXXX
---------------------------------
---------------------------------
david ingram replies:
Both countries make the transportation of more than
$10,000 in pieces a crime as well.
However, if you were sending a $1,000 a month to a
savings plan or something, that would not matter.
The crime would be trying to assemble the more than
$10,000 in the other country when you had the ability to send it all at once.
I.E. You have $25,000 in a bank in Seattle and
send $5,000 every couple of days until it is all in Canada.
In that case, if your banks spotted what was going
on, "they" would report you.
The bank will also report when several cheques arrive
from different sources and they add up to significant amounts whether the source
is from the US or not. This is to stop people from keeping their money in
other people's accounts and assembling it when they need it.
All part of anti money laundering legislation.
=============
the original question and answer follows
What forms do I have to fill out if I am
transporting more than $10,000 across the Canadian Border
==============================
david ingram replies: The forms are E677
and E667 for Canada and as of September 1, 2004 )today) 104 and 105 for
the US if you are bringing the money out of the US into Canada..
The US bank will report the deposit or withdrawal to the
US FINCEN on form 4789 (which is still valid until August 31, 2004) or more
likely the new form 104 which you can find at: http://www.irs.gov/pub/irs-pdf/ffc104.pdf
When you then move the money to Canada by money order or check,
the bank or financial institution will report it again.
The US penalties for failure to fill in these simple forms is up to
$500,000 PLUS 5 years in jail.
If you remove more than $10,000 at any one time, the bank will
report those transactions as well.
If you decide to carry the cash or transport it out of the USA
as a cashier's cheque, you have to file form 105 (old form 4790). You can
find the form at: http://www.irs.gov/pub/irs-pdf/ffc105.pdf
Canada has moved its forms in the last few days and i
had a devil of a time trying to find them. You can find both E677 and E667
below.
E667 is filled out by yourself and E677 is filled out
by the financial institution.
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 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. expert US Canada Canadian
American Mexican Income Tax help
Therefore, if an email is not answered in 24 to 36 hours, it is lost in
space. You can try and resend it but if important, you will have to phone
to make an appointment. Gillian Bryan generally accepts appointment
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(Seattle, Portland, Los Angeles) time at (604) 980-0321.
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Disclaimer: This question has been answered without detailed
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This is not intended to be definitive but in general I am quoting $800 to
$2,800 for a dual country tax return.
$800 would be one T4 slip one W2 slip one or two interest slips and you
lived in one country only - no self employment or rentals or capital gains - you
did not move into or out of the country in this year.
$1,000 would be the same with one rental
$1,200 would be the same with one business no rental
$1,200 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.
$1,500 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
$1,600 would be for two people with income from two countries
$2,800 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 $150.00
up.
With a Rental for $350
A Business for $350 - Rental and business likely $450
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 $800 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.
Just a guideline not etched in stone.
This from "ask an income trusts tax 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
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