Wonder if someone can help
I'm a Canadian citizen who has a fiancé in the us,she is sponsoring me under the k1 visa,once approved I will become a permanent resident in the us.
I have non registered mutual funds with RBC and like to leave them behind because of the poor exchange rate at the moment .
I'm getting different answers every time I ask,would someone know if I can leave this behind or not,thank
Mutualmfunds
Moderator: Mark T Serbinski CA CPA
Cdn firms are not permitted to deal with US resident clients with non-registered accounts.
Also, these funds, in anything other than an RRSP/RRIF, will attracted extra reporting and year-by-year tax (as PFICs -- much already written on this). So any possible currency gain will be wiped out by tax prep fees and tax. This would also apply to any TFSA you have.
Since you are going to be charged departure tax on these anyway, I would be simply collapsing the account.
You can always keep the cash is a Cdn bank if that is your concern, but if you want it invested, it will have to be in US, and in other funds OR in your RRSP. You could always invest in Cdn firm on the US exchange, if you think the C$ will improve.
Also, these funds, in anything other than an RRSP/RRIF, will attracted extra reporting and year-by-year tax (as PFICs -- much already written on this). So any possible currency gain will be wiped out by tax prep fees and tax. This would also apply to any TFSA you have.
Since you are going to be charged departure tax on these anyway, I would be simply collapsing the account.
You can always keep the cash is a Cdn bank if that is your concern, but if you want it invested, it will have to be in US, and in other funds OR in your RRSP. You could always invest in Cdn firm on the US exchange, if you think the C$ will improve.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
What exactly were you told "different"?
That you CAN keep this account? it is not a tax issue, it is an SEC issue. So your US tax lawyer would know nothing of this, and likely knows little else about cross-border matters. Otherwise why on earth would you be asking a question on the internet, if you are already dealing with an expert in the flesh?
As I said, they cannot MANAGE the account (I used the term "deal with") for you, you can only SELL. This has long been the case. SEC Rule 15(a)(1). If you want to risk leaving the investment and not being able to sell, that is up to you.
However, it is not really up to you, as, many firms, as soon as you tell them that you live in US (you wouldn't lie and hide this fact now, would you?) will insist you close the account. While the SEC rules have "softened" on this issue in the past 2-3 years(SEC rule 15(a)6 for example), NO big brokerage (let alone a bank mutual fundco) that I know of wants to touch this, and go through the expense and legal jeopardy of being compliant with this new rule. The people to get in touch with would be RBC themselves, not your US tax lawyer, nor me. RBC will tell you what THEY will do for you, since it is their jeopardy.
Regardless, just like any US citizen living in Canada with these types of mutual funds, you will face inefficient tax treatment, year by year, on these funds, as well as reporting costs. Your US tax lawyer will be happy to charge these to you.
And as to 'loosing', you would not LOSE anything if you kept it in cash in Canada, which I also suggested. You could hold the C$ until they rise. I would rather be investing in US (or the rest of the world) at that point.
As to where the C$ will go in the next few years, your GUESS is as good as my GUESS. But given that historically since NAFTA the C$ has been more often LOWER than current rate rather than HIGHER, I would find any optimism about the C$ misplaced.
But, that is opinion. Feel free to ignore. What I said about SEC, PFIC and departure tax however should not be ignored.
So, with that, I'll leave you to it. All the best.
That you CAN keep this account? it is not a tax issue, it is an SEC issue. So your US tax lawyer would know nothing of this, and likely knows little else about cross-border matters. Otherwise why on earth would you be asking a question on the internet, if you are already dealing with an expert in the flesh?
As I said, they cannot MANAGE the account (I used the term "deal with") for you, you can only SELL. This has long been the case. SEC Rule 15(a)(1). If you want to risk leaving the investment and not being able to sell, that is up to you.
However, it is not really up to you, as, many firms, as soon as you tell them that you live in US (you wouldn't lie and hide this fact now, would you?) will insist you close the account. While the SEC rules have "softened" on this issue in the past 2-3 years(SEC rule 15(a)6 for example), NO big brokerage (let alone a bank mutual fundco) that I know of wants to touch this, and go through the expense and legal jeopardy of being compliant with this new rule. The people to get in touch with would be RBC themselves, not your US tax lawyer, nor me. RBC will tell you what THEY will do for you, since it is their jeopardy.
Regardless, just like any US citizen living in Canada with these types of mutual funds, you will face inefficient tax treatment, year by year, on these funds, as well as reporting costs. Your US tax lawyer will be happy to charge these to you.
And as to 'loosing', you would not LOSE anything if you kept it in cash in Canada, which I also suggested. You could hold the C$ until they rise. I would rather be investing in US (or the rest of the world) at that point.
As to where the C$ will go in the next few years, your GUESS is as good as my GUESS. But given that historically since NAFTA the C$ has been more often LOWER than current rate rather than HIGHER, I would find any optimism about the C$ misplaced.
But, that is opinion. Feel free to ignore. What I said about SEC, PFIC and departure tax however should not be ignored.
So, with that, I'll leave you to it. All the best.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
And here is a recent article that talks about this:
http://cardinalpointwealth.com/options- ... o-the-u-s/
http://cardinalpointwealth.com/options- ... o-the-u-s/
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
"... when you loose 30 percent of your money just by converting to us ... "
You need to think a bit about exchange rates. The CAD and the USD are not the same animal, and it is only an accident of language that the word "dollar" is used for both. For example, today a CAD is worth 0.54 of a British pound (GBP). Do you think that you would be losing 46% of your money if you converted dollars to pounds?
I know, traditionally the CAD and the USD have sometimes been around par. But that does not mean there is a natural equivalence between the currencies at par just because they are both called a "dollar". What if one were called a mark and the other a franc?
Another way to look at it is implicit in what nelsona said -- you have already lost your 30% because you failed to make the exchange when the currencies were at par. Do you propose to get it back by foreign exchange speculation?
You need to think a bit about exchange rates. The CAD and the USD are not the same animal, and it is only an accident of language that the word "dollar" is used for both. For example, today a CAD is worth 0.54 of a British pound (GBP). Do you think that you would be losing 46% of your money if you converted dollars to pounds?
I know, traditionally the CAD and the USD have sometimes been around par. But that does not mean there is a natural equivalence between the currencies at par just because they are both called a "dollar". What if one were called a mark and the other a franc?
Another way to look at it is implicit in what nelsona said -- you have already lost your 30% because you failed to make the exchange when the currencies were at par. Do you propose to get it back by foreign exchange speculation?