Moving to California; need to confirm my notes

CaliMover · Post by **CaliMover** » Tue Oct 07, 2014 12:23 pm

Hello friends

This forum has very rich information. I am glad someone named ladygeek on booglehead forum pointed me to this forum. Since last week, I read several posts relevant to my situation in this forum. Here is my take away note. I just wanted to make sure I got this right.

Details: Moving to California this December end (for 3 years for now but may be longer) but will begin work remotely starting this NOV on USA payroll. I have 2 separate questions on this. I will post at the end.

#1 TFSA
Close/collapse it before moving to USA. Amounts in these accounts: $16,000 in my account and another $16,000 in spouse account

#2 RRSP
Close it after moving to USA. Take 25% Cdn tax hit. Amount in this acct: $21,000
Q's: Do I still need to crystalize unrealized growth in RRSP before moving?
What should be the timing? I mean should I initiate closing on day 1 I land USA?
I don't think RRIF route to lower taxes wonâ€™t work in my case.
Should I file 217 to get refund?

#3 RESP
This is tricky to me. We are expecting baby soon this week I guess. Should I bother to open RESP now and leave it open till December and close it before moving? or should I transfer the custodian to an Canadian here?

#4 Bank Accounts
Will consolidate to just one banking institute

#5 Credit Cards
Thinking to close or consolidate to 1 or 2 cards with no annual fee

#6 Cash
With savings and collapsed TFSA money I would have at least $50,000 that I would have to convert to USD. Thinking to use norbert Gambit route as I cannot take more than $10,000 during border crossing

Now Q's regarding move
> I will be on USA payroll in NOV working from CANADA and wonâ€™t move physically until DECEMBER end. For closing purpose for example closing RRSP as foreign resident when should I do it? NOV or end of DEC?
> I have the flexibly in relocation date. My employer wanted me there by 2nd week of January 2015. For taxation purpose which is best move? end of December or 1st week of January? The only reason we choose to move end of December is quite holiday period for settling down etc.
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nelsona · Post by **nelsona** » Tue Oct 07, 2014 1:18 pm

1. Yes
2. Yes, you should crystalize, and you need to inform your broker that you are living in US. I would wait until 2015 to collapse, although you could technically do in December as long as you are sure that you will be considred Cdn non-resident at that time.
3. Huh? RESPs are not that great, why saddle yourself with that for a month.
4. Sure.
5. Sure
6. Why would you carry cash across border? leave in bank, and once US account open write yourself a check.

Q1. You will not be non-ressint until you physically move. That makes #2 essential that you collapse RRSP in 2015. You will file your US retunr as a non-resident: 1040NR. and you will report all 2014 income on your Cdn return.
q2. Doesn't matter. You will file a departure return either this spring, or next. tax arte will be the same.

nelsona · Post by **nelsona** » Tue Oct 07, 2014 1:20 pm

On an exchange note, just be sure you initiate all exchanges in canada. The rate,fees, and, processing times will alawys be more favourable.

nelsona · Post by **nelsona** » Tue Oct 07, 2014 1:23 pm

and you are not allowed to have a Cdn brokerage as a US resident, so norberts won't work.

nelsona · Post by **nelsona** » Tue Oct 07, 2014 1:28 pm

On an exchange note, just be sure you initiate all exchanges in canada. The rate,fees, and, processing times will alawys be more favourable.

CaliMover · Post by **CaliMover** » Tue Oct 07, 2014 4:32 pm

Thanks much for replies nelsona.

Just need some clarification:

>Yes, you should crystalize, and you need to inform your broker that you are living in US

By crystallize I am thinking to sell or collapse all portfolio and move to some money market fund. Correct?

>You will file your US retunr as a non-resident: 1040NR. and you will report all 2014 income on your Cdn return.

On 1040NR i just report USA income i.e. NOV and DEC salaries whereas on CDN return include all world income including NOV and DEC?

>On an exchange note, just be sure you initiate all exchanges in canada. The rate,fees, and, processing times will alawys be more favorable

I am assuming you meant convert all money while in Canada then in USA? I do have my brother US bank account that I can use for Norbert Gambit

nelsona · Post by **nelsona** » Tue Oct 07, 2014 4:52 pm

Crystalizing means selling any investmwents that have grown. You can buy others, or as you say put in a money nmarket, as long as you sell the funds that have gained. Otherwise the gains will b part of the taxable portion of your RRSP in US.

You are correct on 2014 returns. Canada will give you credit for US tax form your 1040NRas well as FICA.

As I understand it, you need more than a US bank account for Norbert gambit. You need a CDn broker (and eventually a US broker). Once you move you can no longer have a Cdn broker and the time it takes to transfer the ETFs to your US brokerage might not make the play successful.

But I won't talk about that naymore if Norbert wants to explain (or correct me) he can.