overlapping residency dates

[DesertBound]

I'm a Canadian citizen, living in the US.
Married a US citizen in January 2013 while in the US as a tourist.
I spent over 9 months in the US in 2013, but only received a green card in May 2013.

Canada has deemed me a non-resident for tax purposes starting in mid-December 2013.
Am (only) now preparing 2013 income taxes, filed jointly with my husband.
My income in 2013 consisted solely of rental income from Canada and a withdrawal of $10K from my RRSP. (less withholding tax)
Sold my primary residence in Canada in September 2013. That also contained a legal rental suite.
I'm currently preparing form 8891 for remaining RRSPs in Canada.
I was leaning towards filing as a US resident for the entire year, since I was in the US from Jan - Dec, less 4 trips out totalling just over two months.
But am I missing some consequence of doing so?
Thanks for any advice.

[nelsona]

What was the reason CRA gave for determining (not "deeming" which is a special term) that you left Canada in Dec 2013? From what you say, I would think you left in January or at the latest, May. But if you are satisfied with their decision. let it be.


In general, one files full year taxes in US, regardless of arrival date, as it advantages both you and your spouse. It has nothing to do with your CDn departure date. You do however have to report world income on your joint IRS return. In fact, filing full year is the ONLY way you can file jointly.

[DesertBound]

Thanks for the quick reply. And thanks for pointing out the deemed vs. determined semantics.

I had significant residential ties through December 2013 - first the house I owned, and then one I rented while I cleaned up my financial dealings in Canada and got the rest of my move organized.

The CRA determined that my last exit date in 2013 (mid December) was the date I became a non-resident.

I do want to file jointly, but I've discovered that by doing so, it's costing me a few hundred dollars extra! That's right: Utah will get a tax payment even after I've claimed my foreign tax credit. We must have been in such a low income bracket that Canada was a better tax deal for that moment in time. Go figure.
Cheers!

[nelsona]

Utah (like most states) doesn't accept foreign tax credits. But, really, you should not need them anyways.

Be careful in your state filing. You may not have to report all your income from 2013 on the state return, if you were not living there.

While you are ELECTING to file as a resident of US for federal purposes, this does not mean you were actually resident of US (you could argue) until you left canada in December.
The CRA determination would be ample proof that you lived in canada and not US, let alone Utah.
If you moved from NY to Utah, you would only report UTah-baded income, so the same applies when moving from another country.

And remeber that very little if any of your RRSP withdrawl would be considered taxable in US, only the growth since jan 01, 2013.

[DesertBound]

You're hired!

Thanks.

[DesertBound]

"remember that very little if any of your RRSP withdrawl would be considered taxable in US, only the growth since jan 01, 2013."

But......., the IRS tells me "SECTION 6. DISTRIBUTIONS FROM CANADIAN RETIREMENT PLANS
Distributions received by any beneficiary or annuitant from a
Canadian retirement
plan, including the portion thereof that constitutes income that has accrued in the plan
and has not previously been taxed in the United States, must be included in gross
income by the beneficiary or annuitant in the manner provided und
er section 72, subject
to any applicable provision of the Convention."

Am I missing something here?

[nelsona]

No, section 72 has always applied. It has always describes "investment" in an account, as being non-taxable. This has always included pre-arrival income in an RRSP, ever since 1985.

The subsequent example in the Rev Proc is what you should worry about. However, nothing has changed in Section 72, so I'm not overly concerned about this.