Canadian Citizen back in Canada, FBAR

Vancouver2014 · Post by **Vancouver2014** » Sat Jul 18, 2015 7:47 pm

I've read a number of posts in an effort to get information but am still confused regarding my situation. I lived in the US for three years--GC--with my American citizen spouse. We filed jointly. I did not earn income--had a couple of small savings accounts in Canada. I left abusive spouse in August 2014, returned to Canada, started part-time job before Christmas. Our Seattle home sold in March of this year, divorce finalized in April. No alimony but my downpayment for the home was returned to me--$50,000. Surrendered my GC at the border last month. My ex filed his 2014 taxes without me since he didnt' want my Canadian income included on his taxes. I plan to file my 2014 taxes now that I know but do I also need to file in the US next year since I'm still holding a GC in 2015? And secondly, the 50,000 I now have in an RRSP--will I have to file a FBAR?! And will I be looking at a huge tax bill and penalties?! Feeling very upset--my lawyer did not tell me about any of this. Had I known I would have given up my GC as soon as I walked out on my husband. I would really appreciate some clear answers before I make an appointment with an expensive accountant.

Vancouver2014 · Post by **Vancouver2014** » Sun Jul 19, 2015 3:38 am

Well, I've spent several hours reading the forum and it appears I should have given up my green card last year in order to avoid paying FBAR for 2015. I was told to hang on to my GC until the house was sold--it sold this spring. What a mistake. Now, next year I'll have to do my taxes for the IRS and file FBAR. I'm guessing I will have to pay thousands in taxes from the sale of my house? I thought I read somewhere that if you sell your resident home before returning to Canada there are no taxes owed in the US? And thanks to my ex, i'm months late in filing taxes and an accountant in Seattle has advised me to hire a lawyer. Can somebody advise?

nelsona · Post by **nelsona** » Sun Jul 19, 2015 11:22 am

Relax. First, your house is not taxable in either country, since it was your residence. You won't even have to mention it on your US tax return, and you can take the principal residence exemption if there is nay profits in the sale for Cdn purposes.

FBAR is simply a report. List your accounts and that is it.

Vancouver2014 · Post by **Vancouver2014** » Sun Jul 19, 2015 4:41 pm

Seriously? Why would the accountant be telling me to get a tax lawyer? For some reason, I thought the FBAR accounts were taxed on given his response to me.

The first year I was in the US --2011--I had a savings account in Canada that slightly exceeded 10K. I did not file FBAR nor did I include it in foreign investment income on my husband's US taxes. Should I be voluntarily disclosing this now that I've already surrendered my GC? Do I need to inform my EX and will he need to redo his 2011 taxes?

nelsona · Post by **nelsona** » Sun Jul 19, 2015 4:53 pm

FBAR is filed separately from 1040. You need to file FBAR for the years you are missing. You probably need an accountant, not a lawyer to correct this. Since they are your accounts only, the FBAR would be filed by you alone.

Your RRSP is not subject to tax in US unless/until you withdraw it. It needs to be reported on FBAR however.

The only INCOME TAX issue you have is not reporting the interest in your Cdn bank accounts, so your joint 1040's will need to be amended to include any on that income, with tax, and penalties ensuing.

Vancouver2014 · Post by **Vancouver2014** » Sun Jul 19, 2015 5:00 pm

Oh no. You mean I still have to report less than $300 in investment interest for 2011 otherwise face fines and penalites? I have a restraining order on my ex, can't contact him and my last email to his/our accountant was ignored.
Since I no longer have a GC, can the IRS still come after me for such a small error?

nelsona · Post by **nelsona** » Sun Jul 19, 2015 5:15 pm

Income is income, no matter how little.
You signed the tax returns jointly.
As part of renouncing your GC, they will be going over your tax records.

Vancouver2014 · Post by **Vancouver2014** » Sun Jul 19, 2015 5:26 pm

I see, thanks. I will have to contact our old accountant again to explain this to him and ask him to redo the 2011 joint tax return. So ironic becuase I never wanted to file joint returns. My ex wanted the deductions so forced me to file jointly.

Sorry, just one more question, Nelson. The FBAR came into effect just last year, right? So do I only file FBAR for 2014 or do I need to file for earlier years to cover the time I had my GC and lived in the US?

nelsona · Post by **nelsona** » Mon Jul 20, 2015 8:05 am

Easy on the "forced" thing. 99% of couples file jointly, otherwise the taxes are MUCH higher.
You had the foreign accounts, so you should have educated yourself about what to do with them back then, There is a box on every schedule B that asks about it, as a reminder.

FBAR has been in effect for as long as I can rmember. You need to catch up with all of these, which your accountant will point out,

Nathan1992 · Post by **Nathan1992** » Mon Jul 20, 2015 11:55 am

I didn't file my own taxes. Never saw the paperwork and I did educate myself in regards to tax situations back in 2009 before I immigrated in 2011--no mention back in 2009 about FBAR although I knew about the foreign income and gave my ex my interest slips from Canada. He said it was such a small amount so he didn't bother giving it to the bookkeeper. My ex had financial control and yes, he insisted on filing jointly even though I didn't want to due to his messy financial situation with his previous ex.
I'm going to collect my interest income slips and send them to his accountant and insist that the joint returns be amended. I'll also file the FBARS for the last few years that I was in the US.
Immigrating to the states and marrying a man with serious control and anger issues was the biggest mistake of my life. I've lost most of my financial security and am trying to hang onto what little I have left--the $50,000 from the sale of my home. I'm in my late 40s, not easy to start over. Thanks for the advice and for this forum. It's a lot of information to digest so I'm booking an appointment with a cross border tax accountant since I think the unreporting of my interest income could be serious.

nelsona · Post by **nelsona** » Mon Jul 20, 2015 12:39 pm

nathan this post was not addressng your case.

Vancouver2014 · Post by **Vancouver2014** » Mon Jul 20, 2015 1:12 pm

Sorry, I logged in under my son's user name--he has asperger's so I'm helping him with his questions--you've answered him on his post and I think he feels safe in moving forward to filing the FBARS without getting his dad into trouble. He's been through a lot--his dad married an american and moved him and his little brother to the States and I also moved to the US with my US citizen husband. I returned to Canada first, Nathan followed. I am more concerned now over the unreported interest than the FBARS.

nelsona · Post by **nelsona** » Mon Jul 20, 2015 2:08 pm

The FBARs will get you in more trouble actually, simply because you fialed to do BOTH: failed to report the account AND faied to report the income.

I think I've said enough on this topic, I'll let you 2...3..5 , sort it out.

Vancouver2014 · Post by **Vancouver2014** » Mon Jul 20, 2015 6:14 pm

Hi, like many people here on the forum, we didn't know about FBAR--so obviously we're not the only ones worrying about filing overdue FBARS and amended income tax statements. In any case, I've heard back from our US accountant who pretty much told me I was worried about nothing since we're talking about less than $8000 in unreported income and $385 worth of interest spread over four years. He's going to amend our tax statements for the four years I was a US person to include the unreported interest income and Canadian accounts and file those right away. I will then file the FBARS. He acknowledged it was his error as he never asked me whether I had accounts in Canada and I never saw the income tax forms--I only signed. He said at most, I may be facing several hundred dollars worth of penalties, tops. By the way, thanks for worrying the hell out of my son. As a person with Asperger's he deals with a lot of anxiety and I've been trying to calm him down. You could have been a little more gentle. Thank you for your advice and time.

nelsona · Post by **nelsona** » Mon Jul 20, 2015 6:33 pm

As I've said repeatedly, it's not the tax on interst that should worry you, it is the failure to FBAR, which is costing 1000's of US citizens in Canada $1000's of dollars to fix.
Maybe your son's condition makes it hard for him to understand when I said that he has nothing to worry about in terms of income tax, and that he did not have to file a return, and that his RESP was not an issue. So, he has FBARS on his savings account to worry about. I thought I was pretty clear, but maybe he can't understand this.

What's your excuse?

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Canadian Citizen back in Canada, FBAR

Canadian Citizen back in Canada, FBAR

Really worried.