Search found 74 matches

by mackayr
Fri Jul 09, 2021 1:29 am
Forum: Canada / United States Tax & Accounting
Topic: Transfer of RRIF to spouse on death of US citizen
Replies: 7
Views: 2078

Re: Transfer of RRIF to spouse on death of US citizen

Thanks for heading me in the right direction. On further research it seems that only US Situs property (eg. US stock) and real / tangible property located in the US is subject to the gift tax. This would include US stocks included in his RRIF. Furthermore, it seems that unless we can support the amo...
by mackayr
Wed Jul 07, 2021 6:29 pm
Forum: Canada / United States Tax & Accounting
Topic: Transfer of RRIF to spouse on death of US citizen
Replies: 7
Views: 2078

Re: Transfer of RRIF to spouse on death of US citizen

Wait ... a non-resident spouse can only inherit $150k without incurring tax? They also have a joint stock portfolio valued at approximately $225k USD. I was planning on recording a disposition of the stocks and reporting the capital gains to time of death on his final return. Is there a tax on the p...
by mackayr
Wed Jul 07, 2021 6:14 pm
Forum: Canada / United States Tax & Accounting
Topic: Transfer of RRIF to spouse on death of US citizen
Replies: 7
Views: 2078

Re: Transfer of RRIF to spouse on death of US citizen

Thanks for the informative response, Nelsona. That's what I suspected, but yes ... still kind of surprised. The value of the RRIF in CDN is only $85k at the end of December 2020, so well under the threshold. Is there a required 8833 disclosure for this, or because it's under the $150k limit, there's...
by mackayr
Tue Jul 06, 2021 7:41 pm
Forum: Canada / United States Tax & Accounting
Topic: Transfer of RRIF to spouse on death of US citizen
Replies: 7
Views: 2078

Transfer of RRIF to spouse on death of US citizen

For Canadian tax purposes, an RRIF may be transferred to a spouse's RRSP to avoid the FMV income inclusion on death. As long as the amount is transferred on or before Dec 31 of the year following death, the surviving spouse reports the full FMV as income on her return, and claims an offsetting deduc...
by mackayr
Mon Jun 14, 2021 11:29 pm
Forum: Canada / United States Tax & Accounting
Topic: FTC with CERB and foreign earned income exclusion
Replies: 3
Views: 1374

FTC with CERB and foreign earned income exclusion

OK ... I have a simple situation, and would like to clarify the completion of form 1116. All figures in USD for convenience: Single Canadian resident, US citizen Canadian employment income = $7,500 (qualifies for 2555 foreign earned income exclusion) CERB = $12,500 No other income worldwide Canadian...
by mackayr
Thu Jun 03, 2021 4:59 pm
Forum: Canada / United States Tax & Accounting
Topic: FTC calculation when 60j transfer from IRA to RRSP
Replies: 2
Views: 1035

Re: FTC calculation when 60j transfer from IRA to RRSP

Update: I found a reference in the ruling that indicates that the net foreign non-business income doesn't have to be reduced by the amount transferred to the RRSP, so that only leaves the question of the foreign tax paid. Should the foreign tax paid be prorated to remove the portion that relates to ...
by mackayr
Thu Jun 03, 2021 12:29 am
Forum: Canada / United States Tax & Accounting
Topic: FTC calculation when 60j transfer from IRA to RRSP
Replies: 2
Views: 1035

FTC calculation when 60j transfer from IRA to RRSP

Is the FTC prorated when there's a large 60j transfer to RRSP? Here's the scenario: (All figures are in CDN for convenience) Social Security income = 8.9k Lump sum withdrawal from IRA = 126.1k Transfer to RRSP (qualifying for 60j) = 60k US tax = 18.8k Canadian federal and provincial tax = 18.2k Taxp...
by mackayr
Mon Mar 01, 2021 11:18 pm
Forum: Canada / United States Tax & Accounting
Topic: Form 1116 when foreign earned income claimed
Replies: 5
Views: 1731

Re: Form 1116 when foreign earned income claimed - CCH Axcess

Hi Nelsona, Thanks for the response. When you say "they", I trust you mean the accountants (just to make it clear for future readers of this post). That's what I figured, but it certainly doesn't seem to agree with the instructions, at least on the surface. Here's what the guide says: http...
by mackayr
Sun Feb 28, 2021 8:47 am
Forum: Canada / United States Tax & Accounting
Topic: Form 1116 when foreign earned income claimed
Replies: 5
Views: 1731

Form 1116 when foreign earned income claimed

I'm confused about how to complete Form 1116 when foreign earned income exclusion (Form 2555) has been claimed. To illustrate, here's a simplified (and extreme) example: Canadian employment income - $18,000 (foreign earned income exclusion claimed for full amount) Canadian employment insurance benef...
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: 2933

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: 2933

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: 3487

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: 3487

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: 3487

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: 3487

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.