STEVE walks into a doctor's office. The receptionist asks him what he has.

STEVE says, "Shingles." So she writes down his name address, medical insurance number and tells him to have a seat.

Fifteen minutes later a nurse's aide comes out and asks STEVE what he has.
STEVE says, "Shingles." So she writes down his height, weight, has him fill out a complete medical history, then tells STEVE to wait in the examining room.

A half hour later a nurse comes in and asks STEVE what he has.

STEVE says, "Shingles." The nurse gives STEVE a blood test, a blood pressure test, an electrocardiogram, and tells STEVE to take off all his clothes and wait for the doctor.

An hour later the doctor comes in saying, "So, STEVE what brings you here today?" STEVE says, "I've got shingles."

Where, the doctor asks ?"

Hi,

I read the newsletter, but one thing still confuses me a bit (even after
your fifteen versions of "what to do"). As far as I can see, you still need
the money to pay off the business loan that you are using to pay off the
property. Where does this additional money come from if you are using the
rental income to pay down the principal on the family residence?

Best wishes,

I obviously did not understand the 30 year rule or substantial payments to
FICA to avoid a Clawback when receiving OAS / CPP from Canada . My
understanding was that the US / Canada Social Security Totalization rules
overrode the WEP but it appears I may have been incorrect. Read on if you
are going to be collecting both with les than 30 years into the FICA (US
Federal Insurance Contribution Act or Social Security), I have no time to
study or figure it out at the moment so will leave it to others. I have
received several different replies:

Andrew Nelson sent the first correction:

I guess you are not aware of the Windfall Elimination Provision (WEP)
that hits many cross-border workers.

THAT is what this person is complaining about. It really does sock
anyone who earns foreign pension (including CPP) but has less than 30
years (not 10) of SS-contributions.

As the writer states, it does result in a substantial knock down of SS,
unless the person can manage to reach the 30 year mark.

This is the SSA's equivalent of the IRS's AMT provisions, and can hurt
pretty bad.

There is a couple of pros out there (namely Keats) who have been
successful in getting the SSA to us the totalization treaty to override
WEP, but it is not simple.

Keats has a chapter on it in his latest Border Guide. Only his latest
version, since WEP is just now hitting retirees.

AGN

=====================

Mark sends the second addition


Warning: the following is wordy but I've included some details that might
be
useful in your practice. I also have a new question at the end. Hope I'm
not
stretching my luck...

Thank you for such a rapid response and for forwarding all those dialogues
with
others that pertained to my situation. I was prepared to wait several
months,
knowing you have quite a backlog.

I very much like your suggestions about H&R Block and Jim Pettinger. I'm on
his mailing list and have often thought about attending one of his seminars,
but haven't as I'm not much interested in export-import. I will definitely
give him a shout. I've also wondered about the Victoria Clipper (Seattle
company) that docks here in Victoria a block from where I live. I just
missed
an accounting job advertised by a Canadian mining company literally metres
south of the border in Blaine. They have gold mines in both countries. I'm
hoping their newly hired accountant leaves soon;) Seems to me I'd be a
perfect
fit for them to visit their mines in Alaska and B.C. & Quebec.

As to the US/Canada Social Security Agreement, my understanding is that
would
apply if I were working in Canada on a short-term basis, but I've been
resident
in Canada nearly 5 years, so I've contributed to CPP for a few years now.
As
you know, it takes nearly that long to complete the citizenship path, which
I've just done a couple weeks ago. I did pay a personal visit to Social
Security in Bellingham a couple years ago to learn more about the Windfall
Elimination Provision, and I did find out they would never deduct more than
50%
of my CPP from Social Security. Such generosity. I have 25 years worked in
the US (I'm 57 y.o.) but with 30 I would escape the WEP penalty altogether.
I
spoke with the manager of the SocSec office in B'ham so he knew my situation
and he never said the totalization agreement would apply.

See WEP info: http://www.ssa.gov/pubs/10045.html

FYI, WEP was instituted in 1983 during the Reagan presidency as
part of a package to save Social Security. For someone like me,
contributing to another country's system, it's just a tax grab
ripoff, in my humble opinion. I liken it to paying premiums on
two life insurance policies and then having the beneficiary find
out upon my demise that the 1st company won't pay because there
had been a second policy. Never mind I'd paid premiums for both.

I'm aware of the relative withholding rates for FICA vs. CPP, and I would
only
work for someone else in the US to avoid the self-employment rate. I figure

for the five years I'd work in US, it would work to my benefit to pay the
higher FICA rate as I would increase my retirement income about $200/mo.
between earning more SocSec and avoiding the WEP. I intend to live in
Canada
in retirement in spite of higher taxation because my partner is Canadian
(only)
and detests the U.S.

I won't be subject to the OAS clawback in retirement, sorry to say, though I
should approach the $60K annual income limit. Jointly, our goal is to have
about $60K income EACH so we avoid the clawback. By the way, I currently am
self-employed in Victoria as a small-time (friends & family) financial
advisor.

The current net income limits for OAS clawback, from 0-100%, are $60,806-
$98,850. (You had used a figure of $80,000+ for the upper limit in your
reply.)


ANOTHER SEPARATE (BUT RELATED) QUESTION

I wasn't going to send this to you until I heard back on the first one, but
we're already there!

I fall into Category 2 below (between the dotted lines) for a full OAS
pension.
---------------------------------------------------------------------------
Full Pension

Normally, if you meet the conditions in either of the two categories
below, you qualify for a full pension:

Category 1 - You meet the one condition below

You lived in Canada for at least 40 years after turning 18. NO

Category 2 - You meet the three conditions below

1. You were born on or before July 1, 1952. YES
2. Between the time you turned 18 and July 1, 1977, you
lived in Canada for some period of time. ???
3. You lived in Canada for the 10 years immediately before
your application was approved. YES
---------------------------------------------------------------------------

#1) I was born in 1948.
#3) I will have been resident in Canada 12 full years when I turn 65.

The gray area for me is condition #2, as I was a student at U. of Alberta in
1976. There is some question, even among the local OAS office personnel,
whether that qualifies as 'living' in Canada. My own opinion is that I did
not 'live' anywhere else during that time. I cannot find any definition
of 'living' or 'residence' in the OAS Act or in OAS appeal cases.

So, at long last, my question for you:

DO YOU KNOW OF ANY LAWYERS THAT WOULD HAVE EXPERTISE IN OAS ELIGIBILITY
APPEALS?

The difference between a partial (12/40=30%) and full OAS pension for me is
just over $4,000/yr., not an insignificant amount in my retirement planning.
I'd like to know what my chances are of qualifying for the full pension.

Thanks again for all your help and super-rapid response.

QUESTION:

I am in Canada on a work permit, but my wife is a landed immigrant. I would
like to know if I can contribute into a spousal RRSP (I have some room for
2005 based on my last tax assessment).

Thanks.

Subject: Name on title to avoid probate


I read a couple of your recent emails that talk about signing a form if
a child has their name put on the title of a parents property in order
to avoid probate. You said that the form should state that the child
will not use their portion as collateral for a loan and that it is
solely for the purpose of avoiding probate. Where can I get a copy of
this form and have it mailed to me in the US?

QUESTION:

Hi,
I am a Canadian Permanent Resident working on H1B in the US. In an effort
to retain my Canadian PR status and simultaneously H1B, I am planning to
join a company in Detroit and Travel from Windsor Daily. Now, will I be
taxed as a resident by US or Canada or Both?

Eagerly waiting for your response.

Thanks.

I received some 75 replies to my enquiry about getting a California Driver's licence when moving from BC. Some were extremely technical.

Some were funny.

When I had my California Driver's licence back in 1972 or so, they just gave me the licence when I handed in my Manitoba Licence. It has obviously changed since then.

I have included several replies but my favourite is the next one. It includes a lot of food for thought. And, of course, there is a lot of difference between moving to and working in Mendocino or Crescent City and moving to LA or San Francisco with a 30 mile commute.

QUESTION:

I am Canadian citizen, who has an opportunity to work in the Middle East
for a long term project, about 3-4 years. I am planning to move there with my
family, and wondering the tax liability on the income earned there. Also, I
would like to find out how to maximize the tax advantages, if there are any
for working overseas. By the way, I own couple of residential properties
which I am planning to rent out.
Thanks!!

QUESTION:

I have both Canadian and US citizenships. I have lived in
Canada for many years. What is the tax consequence of
abandoning my US citizenship? I have investments in
Canada, but also expect an inheritance from the States in the
future.