Article XXV NOT be better than 1040NR?

telly1 · Post by **telly1** » Wed Apr 23, 2014 4:04 pm

These are good examples nelson. I both of our cases we would be closer to your 1st example than to the second.

When I ran the numbers in Turbo Tax it seemed the tax rates were very close in our case (I included CAD taxes paid, mortgage interest & taxes) but I'm still not 100% sure I'm doing this right. I need to review within TurboTax again & do a few more searches here. Some things have changed since I did this last!

telly1 · Post by **telly1** » Wed Apr 30, 2014 10:29 am

On a pro forma 1040, do RESPs & TFSAs need to be considered?

They certainly are not on a regular 1040NR right?

nelsona · Post by **nelsona** » Wed Apr 30, 2014 11:24 am

They need to be considerd for INCOME. but you do not have to bother with the reporting aspects.

The pro forma is you pretending to be a US citizen living in canada; whatever a USC would put on the 1040 as income has to go on the pro forma. Yopu are coming up with a RATE to apply against your 1040NR effectively connected income.

telly1 · Post by **telly1** » Wed Apr 30, 2014 11:29 am

Thanks nelson.

A USC would include government match (RESP) + any interest or dividend income then. How would one deal with capital gains if you cashed out a portion of a TFSA?

I'm beginning to think it could be feasible to a lower tax rate with the NR in several cases after all.

nelsona · Post by **nelsona** » Wed Apr 30, 2014 12:15 pm

It would be capital gains, just like for a USC living in Canada.