Search found 65 matches

by mackayr
Wed Dec 11, 2019 9:23 pm
Forum: Canada / United States Tax & Accounting
Topic: Foreign tax credit for 60(j) IRS to RRSP transfer
Replies: 5
Views: 1005

Re: Foreign tax credit for 60(j) IRS to RRSP transfer

Thanks for the responses nelsona!

Yes, it's a "lump sum" transfer, so he should be fine. My understanding is that he's transferring his entire IRA to his RRSP over the course of a few years (he did a couple of transfers back in 2016 and 2017), and he's doing more this year (or early 2020).
by mackayr
Wed Dec 11, 2019 3:10 pm
Forum: Canada / United States Tax & Accounting
Topic: Foreign tax credit for 60(j) IRS to RRSP transfer
Replies: 5
Views: 1005

Foreign tax credit for 60(j) IRS to RRSP transfer

Individual is Canadian resident, Canadian citizen, former US green card holder (properly expatriated in 2012). A person takes a distribution from US IRS to transfer to his RRSP. US payer holding the IRA withholds 15% treaty rate (or 30% and he receives a refund of the rest). The person pulls the equ...
by mackayr
Wed Apr 17, 2019 6:49 pm
Forum: Canada / United States Tax & Accounting
Topic: Timing differences - recapture of rental home converted to personal
Replies: 8
Views: 663

Re: Timing differences - recapture of rental home converted to personal

Yeah ... I'm aware of the deemed acquisition, but to be honest, the original purchase would have been better. They moved to Canada in late 2010 ... pretty well when the US dollar bottomed out ... so the majority of the gain is in the exchange rate.
by mackayr
Mon Apr 15, 2019 4:14 pm
Forum: Canada / United States Tax & Accounting
Topic: Timing differences - recapture of rental home converted to personal
Replies: 8
Views: 663

Re: Timing differences - recapture of rental home converted to personal

After crunching the numbers, the $37k recapture now would only result in a $1,900 tax payable, meaning that the FTC on the Canadian return is only $450 (roughly quarter of the income on the US is from the recapture if they did elect to report it). So, in addition to the $1,900 tax payable, they also...
by mackayr
Mon Apr 15, 2019 11:46 am
Forum: Canada / United States Tax & Accounting
Topic: Timing differences - recapture of rental home converted to personal
Replies: 8
Views: 663

Re: Timing differences - recapture of rental home converted to personal

OK .. at risk of splitting hairs: 1) They technically emigrated 11 days after terminating the rental. Rental was terminated on Nov 30th, at which time the residence was their own personal use property again. On December 11th, they emigrated from Canada. Technically, for those 11 days, they had two h...
by mackayr
Mon Apr 15, 2019 9:52 am
Forum: Canada / United States Tax & Accounting
Topic: Timing differences - recapture of rental home converted to personal
Replies: 8
Views: 663

Re: Timing differences - recapture of rental home converted to personal

Still trying to figure out a solution to this. Does anyone know of a way to claim the gain/recapture on the US side earlier? At least that way it would be taxed now (offsetting part of the Canadian income tax), to avoid double tax in the future.
by mackayr
Sat Apr 13, 2019 10:55 am
Forum: Canada / United States Tax & Accounting
Topic: Timing differences - recapture of rental home converted to personal
Replies: 8
Views: 663

Timing differences - recapture of rental home converted to personal

OK ... it seems there should be a way out of this, but I have yet to find one. Here's the scenerio. 1) Taxpayer (US Citizen) moved from US to Canada 11 years ago. Expected to stay in Canada indefinitely. Entire family moved to Canada. No question on residency ... Canadian residents. 2) Taxpayer reta...
by mackayr
Wed Mar 27, 2019 1:18 pm
Forum: Canada / United States Tax & Accounting
Topic: Article XXV application to single Canadian resident
Replies: 6
Views: 538

Re: Article XXV application to single Canadian resident

[quote=nelsona post_id=51628 time=1553696452 user_id=30] And by filing 1040 reporting world income, she doesn't file 1040NR. [/quote] ... but by referencing the filing under XXV(1), this prevents her from getting caught up in FBARs and the likes, right? [quote=nelsona post_id=51627 time=1553696376 u...
by mackayr
Wed Mar 27, 2019 9:24 am
Forum: Canada / United States Tax & Accounting
Topic: Article XXV application to single Canadian resident
Replies: 6
Views: 538

Re: Article XXV application to single Canadian resident

Thanks for the response, @nelsona. That sounds like a fair approach (ie. to file the 1040 that it's a XXV(1) filing). We had been filing 1040NRs for years, until the IRS contacted her to indicate that she had never properly given up her Green Card (she just let it expire instead of filing the approp...
by mackayr
Tue Mar 26, 2019 9:48 pm
Forum: Canada / United States Tax & Accounting
Topic: Article XXV application to single Canadian resident
Replies: 6
Views: 538

Article XXV application to single Canadian resident

I'm trying to understand the application of Article XXV for an individual who is resident in Canada. Here's the scenerio: Canadian citizen Canadian resident US pension (effectively connected) = $1.4k US SS = $10k Canadian OAS = $6k In prior years, she paid no US tax since her exemption of $4k was hi...
by mackayr
Tue Mar 26, 2019 9:30 pm
Forum: Canada / United States Tax & Accounting
Topic: Pro Forma 1040 for XXV(4) calculation for US Return 2018
Replies: 15
Views: 1607

Re: Pro Forma 1040 for XXV(4) calculation for US Return 2018

What used to be paragraph 4 is now paragraph 3, since paragraph 2 was deleted in the 2007 amendment.

"2. Paragraph 2 of Article XXV (Non-Discrimination) of the Convention shall be deleted, and paragraphs 3 to 10 of Article XXV shall be renumbered accordingly."
by mackayr
Tue Mar 26, 2019 8:52 pm
Forum: Canada / United States Tax & Accounting
Topic: Article XXV for Canadian Residents
Replies: 53
Views: 6165

Re: Article XXV for Canadian Residents

Well ... the information I just posted is correct with respect to the formulas, but incorrect with respect to the status of the taxpayer. Apparently this provision (XXV(3)) only applies to married individuals with income from employment. Perhaps someone can help me then with this: Would XXV(1) provi...
by mackayr
Tue Mar 26, 2019 8:22 pm
Forum: Canada / United States Tax & Accounting
Topic: Article XXV for Canadian Residents
Replies: 53
Views: 6165

Re: Article XXV for Canadian Residents

Adding my two cents to try to clarify the issues around "the formula" The theory behind the formula is merely to determine the tax RATE which would apply to ALL income if taxed as US citizens/residents, and then apply that tax RATE to the income on the 1040NR (ie. only the US source income that woul...
by mackayr
Thu Mar 14, 2019 10:13 am
Forum: Canada / United States Tax & Accounting
Topic: Retiring allowance received after immigration date
Replies: 1
Views: 210

Retiring allowance received after immigration date

We have a client with an immigration (to Canada) date of July 11, 2018. Both spouses retired from their employment on July 5, 2018. Both spouses received significant retiring allowances on July 28, 2018. Aside from any benefits from foreign tax credits, I can't find any reason why the retiring allow...
by mackayr
Thu Apr 27, 2017 3:39 pm
Forum: Canada / United States Tax & Accounting
Topic: IRS interest on 1040NR
Replies: 4
Views: 1971

Well, Publication 519 lists interest that is exempt for non-residents. ========================================================== https://www.irs.gov/publications/p519/ch03.html Nonresident Aliens Nonresident aliens can exclude the following items from their gross income. Interest Income Interest in...