U.S. residency - Canadians travelling to the U.S. beware

If you are a Canadian resident who spends extended time in the U.S., you may be required to file a U.S. income tax return and may have other U.S. filing obligations. Being aware of U.S. laws and the obligations imposed by them can help you to avoid unpleasant surprises and costly penalties. There is a popular misconception that Canadians can spend up to 182 days per year in the U.S. without being considered a resident for income tax purposes. In reality, the U.S. Internal Revenue Service (IRS) applies a formula known as the “substantial presence test” to determine if you are a U.S. resident for tax purposes. This formula looks at your time in the U.S. over a three year period. Meeting the test means you may need to file a U.S. tax return; but there are exceptions.

Determining your tax residency status in Canada

The Canadian income tax system is based on Canadian residency status. A common misunderstanding is that it is based on citizenship or immigration status. You may actually be considered a resident of Canada for income tax purposes even if you are not a Canadian citizen or landed immigrant. On the other hand, you may not be a resident of Canada for income tax purposes even if you are a Canadian citizen. This article discusses some of the factors that are considered when determining your residency status for Canadian tax purposes and the tax implications of your residency status.

U.S. estate tax for Canadians

Did you know that Canadians owning U.S. assets – such as stock of a U.S. corporation, a yacht in Florida or a ski chalet in Colorado – may be subject to U.S. estate tax upon death?

Canadian owners renting or selling U.S. real estate

Understand the key tax issues and potential strategies to minimize taxes payable

Transferring a foreign-based retirement plan to an RRSP 

If you spent time working in a foreign country you may have accumulated funds in a foreign-based retirement plan. For example, if you worked in the United States (U.S.), you may have participated in a 401(k) or 403(b) plan, contributed to a traditional Individual Retirement Account (IRA), or another U.S-based retirement plan. If you are settling in Canada you may be wondering whether you can consolidate your foreign-based retirement plan with your Canadian-based retirement accounts.

Unwinding the deemed disposition for returning Canadian residents

If you moved back to Canada this year and still own property that was subject to the Canadian “deemed disposition” tax rules in the year you moved away, there is a special tax election you can file. The tax election unwinds the deemed disposition that triggers unrealized capital gains on the property. The result is a tax-deferral of the income tax paid on the unrealized capital gains on the property, and the possibility of a lower tax liability when the property is actually sold.

Moving from Canada to the U.S.

Before you pack your bags consider the tax and estate planning issues.

Moving from Canada - to another country

Before you pack your bags, consider the tax and estate planning issues

Why your executor / liquidator's residency matters to you

Under Canadian tax law, an estate is considered a trust for tax purposes. A trust is considered to be resident where the central management and control of the trust takes place. This means that if your executor/liquidator is a non-resident, your estate could be considered to be a non-resident too, which could potentially trigger some negative tax consequences and other challenges. That’s why it is very important to seek the assistance of a qualified tax advisor to determine the residency of your estate.

U.S. Foreign Account Tax Compliance Act (FATCA) in Canada

FATCA, which was legislated in 2010, seeks to identify U.S. persons who may evade U.S. taxes by placing assets in foreign (non-U.S.) accounts – either directly or indirectly through certain foreign entities such as corporations and trusts. The legislation requires non-U.S. financial institutions to report relevant information about financial accounts held by identified U.S. persons. The information in this article is intended to provide an overview of FATCA for individuals and entities in Canada.