Serbinski Accounting Firms

Sorry. I was just trying to help.

It wasn't really obvious to me that he was referring to recovering tax above the 15% treaty rate. I don't see how you were able to make that assumption from what he wrote. In any case, I just hate to see anybody mislead by an "incomplete" answer.

It appears that readtheform was a USC and resident of Canada when these US dividends occurred. So US gets first dibs on the taxes. I think he/she needs to collect the FTC on their Cdn return (up to the 15% treaty rate) and then anything above that by re-sourcing on his US return.

For reference ...

Ignoring the capital gains, you might owe the IRS for taxes on any dividends. Your fake US address means that Schwab would not have withheld any taxes. So unless you took the initiative to file/pay US taxes, you might have a US tax liability.

Isn't there a difference between owing tax and owing "extra, uncredited tax"?

If a USC's average US tax rate on the first pass (before credits) is 12% and you had $1000 in US-source stock dividends, wouldn't you owe the US $120 in tax?

Then, assume your average Cdn tax rate (before credits) is 25 ...

"It is rare that using either FTC or combination of FEIE and FTC does not alleviate all US tax. "

I hope you're only referring to earned income with this statement, right? Any US citizen in Canada that has any dividends from US stocks will owe tax to the USA. Of course they can get credit back on ...

You should also be aware that some mutual funds will refuse to sell to you (even in an RRSP) if you are a non-resident. So you should buy whatever fund you want in your RRSP before you leave. Just understand that if you decide to sell and buy a different mutual fund, that might be a problem (call ...

"There is a differnce between US taxing a gain, and the source being US.

Hmmm... Maybe we should avoid talking about where these gains are "sourced" (since that sounds like where we might be getting hung up).

How does a USC living in Canada avoid double-tax on a gain from selling a US stock? I ...

"In reviewing the double taxation and gains clauses, I would hve to amend my earlier statement. Note that my ORIGINAL statement in that thread was 'more' correct, and I should have just left it at that. "

Nelsona - So the bottom line for a USC living in Canada is that gains on a US stock are ...

The "Basic" download/CD version of Turbotax will take care of all the US forms you listed.

Nelsona / Steveh - Thanks. I knew it was superficial loss but could not recall when they changed the rules.

Do you know how this superficial loss gets reported (if at all) on a Canadian return? I suppose I could either ignore it entirely (since this loss is "nil") or I could simply drop my ACB to ...

The reason I thought capital gains on US securities were considered US sourced (and eligible for re-sourcing on the US return) was based on what you told me in the following thread: [url]http://forums.serbinski.com/viewtopic.php?t=2378&start=30[/url]

This is your comment from 22 May 2007 20:16 ...

Hi Nelsona,

To be clear, this investment was a US stock. As a Canadian resident, I understand the CRA treats this as Cdn sourced. But as a USC that has a gain/loss on a US stock, I thought the IRS considered it US-sourced? ...and that was why re-sourcing was necessary in order to get credit for ...

Hi Nelsona,

To be clear, this investment was a US stock. As a Canadian resident, I understand the CRA treats this as Cdn sourced. But as a USC that has a gain/loss on a US stock, I thought the IRS considered it US-sourced? ...and that was why re-sourcing was necessary in order to get credit for the ...

That is incorrect. This transaction would be considered a "superficial loss" by the CRA even when the security is repurchased in a retirement account. So the entire transaction is definitely a "superficial loss" in Canada. Unfortunately, the US differentiates between short-term and long-term gains ...