Investment options for US Citizens resident in Canada

MGeorge · Post by **MGeorge** » Thu Feb 19, 2015 4:31 pm

Hi nelsona - didn't see your last question.
I think you're right - and I admit this isn't what I said in the example. I need to figure this out.....

nelsona · Post by **nelsona** » Thu Feb 19, 2015 4:32 pm

Just incase you mised this post, too:
1099-DIVs do NOT specify foreign income. They only report foreign tax paid.
One needs to consult the fundco for the breakdown of foreign/domestic income source.

MGeorge · Post by **MGeorge** » Thu Feb 19, 2015 5:19 pm

Thanks nelsona. I agree - I can't see the CRA claiming that the dividend was only $85 - I'd have to report $100. I have QCAN in my TFSA so I don't have to report it to Canada anyway.

If I did have to report it to Canada, reporting options are:

A. Claim a $100 dividend of US source. Then claim that I paid the IRS $15 of tax on it (even though the fundco paid Canada the $15)
B. Treat the 1099 div as if it were a T5, claim a $100 dividend for foreign income, and claim I paid $15 in foreign taxes thru the fundco.

What's bothering me, is, wouldn't a non-USC resident of Canada receive a T5 that shows a $85 US sourced dividend. Then, wouldn't the W8BEN require an additional 15% tax to be withheld to pay the IRS.

nohairleft · Post by **nohairleft** » Fri Feb 20, 2015 12:21 am

Dredging up a 6-year-old forum post:

http://forums.serbinski.com/viewtopic.php?t=3488

This relates more to my "what if QCAN invested in worldwide international stuff" hypothetical. In that earlier life, nelsona recommended the following regarding this specific situation and canatech.pdf:

" there is a very detailed discussion of third country taxation in the technical expalantion of article XXIV which I invite your to read."

MGeorge · Post by **MGeorge** » Wed Feb 25, 2015 4:04 pm

THanks nohairleft. I've managed to find canatech.pdf and will read through it. Cheers!