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One last question. Does it matter if some of the tax is not paid in the same calendar year? Can you still claim the portion that is paid in 2015 as a foreign tax credit for 2014? Let’s use the example I provided earlier. If the prorated US tax that I come up with is $1000 on the 1040, but $750 of ...

Thanks so much for your help!

Yeah I was thinking about the state taxes after I posted this and came to the same conclusion. I suppose it would be very rare that you have both US wages and Canadian wages on a state return. What if you had a situation as follows, would you need to prorate state taxes in this case: Husband and wif...

US citizen and Canadian resident. Trying to figure out how to take FICA and state tax into FTC calculation on Canadian side. Here’s an example from one of your previous posts: You earn 10K in US and 15K in Canada. That is a 40/60 split. Your initial 1040 comes up with $1000 of tax, and your Cdn on...

I did make a $15K withdrawal from an IRA in 2014. This is what I'm trying to figure out. The other questions were just more out of curiosity for the future. I respect your time, and realize this is your busy season. If you could just answer the two examples pertaining directly to the IRA that would ...

1, 2 & 3. Right should have explained further. 2555 is only for wages, use 8833 for SS. Still confused on a portion of this – in first post you mentioned that IRA and 401K are taxed same way and are all taxable in Canada EXCEPT for contributions made while a CDN resident. In your last post (1 ...

This is super helpful!! I think the citizenship was confusing me. I just needed to think about this in terms of residency.

1) If you never owned a 401K before 2009, I suppose there will no longer be a need to track your ACB correct? Just gross up your income on the Canadian side by the contribution every year and deduct it on your Canadian return. Then when you make a withdrawal, the entire amount is taxed in Canada correct? If you did own a 401K before 2009, you just pay tax on the growth from inception to 2009 (not contributions while resident of Canada) and tax on everything after this point (growth and contributions post 2009)?

2) You’re right; tax in US on 15K IRA withdrawal was less than $500. Form 2555 to eliminate all employment income and social security not taxed in US via treaty (resident of Canada). Problem was I thought I had to include entire $15K on Canadian side. Just didn’t seem right to me. Have a very large tax bill in Canada of over $5K as a result of the inclusion. The majority of contributions to IRA were made as resident of Canada (Lived in Canada, commuted to US to work, made 401K contributions and converted 401K to IRA). Will have to get out records to calculate this correctly, should only have to include a small percentage of the $15K on Canadian side correct (growth portion)?

3) Just confused by this statement “Canada taxes income, all income, unless a treaty prevents them. Nothing in the treaty prevents Canada from taxiing US pension money the same way US does, which is 100%â€￾. This contradicts what was said above does it not? This seems like it suggests that the entire $15K would have to be taxed in Canada? Please clarify.

4) Thought I would be taxed on growth from past 20 years if I did not physically make a fund switch before leaving Canada. Didn’t think I would be taxed up front, would defer with 8891 and then pay tax in future when withdraw. Would just have a lower starting point (ACB) because I did not “crystallizeâ€￾ the gains before I left Canada. Is this no longer required? I have read that it was required somewhere on this forum. Thought treaty provides no automatic step-up for RRSP like it does for principal residence and non-registered investments deemed to be disposed of on departure?

5) So excluding the new 2009 rules, a US citizen Canadian resident who moves to US, will always pay tax in US on RRSP growth portion only, never the contributions as you outlined above. So the advantage of a non-US citizen with an RRSP is they don’t have to pay tax on any of the withdrawals in the US (growth or contributions). So it’s theoretically possible for non-US citizen to move to US, withdraw entire RRSP and only pay 25% to Canada, nothing to US? US citizen would pay 25% to Canada and report growth portion on 1040 only, taking foreign tax credit for prorated 25% (growth portion only) from Canadian side?

6) What if the roles were reversed and a US citizen made all IRA contributions as a resident of US and then moved to Canada and made a full withdrawal? I assume this would work in reverse and you would not pay any tax to Canada correct?

Thanks again!!

Ok great, that would be very helpful. Thanks!

I'm very confused about how the taxation of withdrawals from an IRA, 401K and RRSP seem to differ. I have read every post I could find on this topic and can't seem to figure this out. Let's assume a US citizen and Canadian resident has a 401K, IRA and RRSP. It's my understanding that if a US Citizen...

Ok great, thanks! Scared me for a minute lol Thanks for all the help! Enjoy your weekend.

Thanks for the quick reply, this was very helpful! I'm glad the treaty was altered to correct this. I'm guessing a lot of people in similar situations were essentially double taxed until they resolved this. I'm a bit concerned about your comment regarding the private shares. Did I do this incorrectl...

I have a very simple question that I can’t seem to find the answer to. Perhaps I have already found the correct answer, but it seems too good to be true. I departed Canada several years ago and completed all of the proper departure requirements (list of properties, deemed disposition of assets, et...

Yes I did have a drop in value, so method #2 would work perfect (providing I get the evaluation). I kind of figured not having the evaluation might create a problem at some point. I was actually worried that CRA was going to ask for it when I completed the T2062 and T2062a; so I mind as well get it now just in case.

Yes I suppose I should get going on this ASAP. I just read that the certificate process can get back logged and sometimes take a couple of months; which may create a temporary cash flow problem. I think I will just stick with method #1 for now; just so I can get the ball rolling on this as fast as possible. With some luck, method #1 will probably work out ok for the Canadian side of things. Because when I include my selling costs on the actual non-resident return, it should eliminate even more of the gain. So I guess all I may be giving up is the approximate $1000 withholding until I file in the spring. It looks like I might get most of this back anyway. Having said that, as you mentioned, I will likely need the evaluation for the US side anyway, so it’s not going to hurt to get it regardless.

Thanks again you have been very helpful ï￾Š

Thank you very much for your quick reply and insight on this matter. This forum has been very beneficial. The monthly method as you have outlined definitely makes more sense. It just didn’t seem right that I would be able to eliminate the gains more than a year after departure. I did not have a so...

I have read almost every related post pertaining to my situation and have done quite a bit of research on my own, and still can’t seem to figure this out. Looking for some help. Situation is as follows. Canadian resident my entire life never married and no dependants. Purchased home in US and star...