Search found 33 matches

by skobes
Sun Aug 15, 2021 11:43 am
Forum: Canada / United States Tax & Accounting
Topic: Is someone with TN1 leaving the US need to pay the exit tax?
Replies: 13
Views: 6151

Re: Is someone with TN1 leaving the US need to pay the exit tax?

Because of the way states link to federal AGI or federally taxable income, it's possible for the deemed-sale etc. provisions of the federal exit tax to have a state tax impact if you are also a resident of the state on the expatriation date. But this is easily avoided by first ending state residency...
by skobes
Sat Aug 14, 2021 9:21 am
Forum: Canada / United States Tax & Accounting
Topic: Is someone with TN1 leaving the US need to pay the exit tax?
Replies: 13
Views: 6151

Re: Is someone with TN1 leaving the US need to pay the exit tax?

> Regarding exit tax, is exit tax only apply for Federal tax? For example, if I live in New York and New Jersey for 5 years with working visa, when I leave, would there be any exit tax or other special tax I will need to pay for state or city? The exit tax is only for individuals who renounce citize...
by skobes
Fri Aug 13, 2021 8:56 pm
Forum: Canada / United States Tax & Accounting
Topic: Clarification Sought on Definition of PFIC
Replies: 3
Views: 3267

Re: Clarification Sought on Definition of PFIC

> If I directly purchase a property (rental, mobile home park, self storage, etc), and hold it under my name, it's not a PFIC, correct? Correct. Any rental income would go on a Schedule E, which is fairly straightforward. > But, if I put it under a business and hold it through some kind of entity (C...
by skobes
Fri Aug 13, 2021 11:59 am
Forum: Canada / United States Tax & Accounting
Topic: Clarification Sought on Definition of PFIC
Replies: 3
Views: 3267

Re: Clarification Sought on Definition of PFIC

The definition of a PFIC is broad enough to encompass most foreign investment entities (mutual funds, ETFs, etc., domiciled outside the US). I would be surprised if the funds you identified were not PFIC's. If you're going to invest in a PFIC, look for one that provides a "PFIC Information Stat...
by skobes
Wed Aug 11, 2021 12:19 pm
Forum: Canada / United States Tax & Accounting
Topic: Is someone with TN1 leaving the US need to pay the exit tax?
Replies: 13
Views: 6151

Re: Is someone with TN1 leaving the US need to pay the exit tax?

> Since I am still a resident of the US based on definitions such as SPT, does this mean that I would still need to provide a statement establishing my residency termination date to the IRA either as part of my income tax return or directly to them? If you meet the SPT for the year of departure (and...
by skobes
Wed Aug 11, 2021 12:02 pm
Forum: Canada / United States Tax & Accounting
Topic: FBAR for account within RESP
Replies: 3
Views: 3323

Re: FBAR for account within RESP

The RESP is an account, reportable on the FBAR and Form 8938. The RESP is also a trust, but it doesn't require Form 3520 reporting (see Rev. Proc. 2020-17 § 5.04 re "trust... for the provision of, medical, disability, or educational benefits..."). The FBAR reports accounts, not positions w...
by skobes
Wed Aug 11, 2021 11:52 am
Forum: Canada / United States Tax & Accounting
Topic: Tax Implications for two full time jobs - 1 in Canada and other in USA
Replies: 7
Views: 3971

Re: Tax Implications for two full time jobs - 1 in Canada and other in USA

> 1. As per the US/Canada tax treaty if one is able to prove his/her stronger ties with Canada in terms of primary residence, family, dependents, other assets, won't he/she be the resident of Canada even if he/she lives in USA for more then 183 days ? Yes, the treaty tie-breaker provisions can be us...
by skobes
Wed Aug 11, 2021 10:01 am
Forum: Canada / United States Tax & Accounting
Topic: TFSA Form 3520 - US agent?
Replies: 2
Views: 2804

Re: TFSA Form 3520 - US agent?

Let's assume for purposes of this question that a TFSA is a trust and needs Form 3520. I'm aware there are other views out there.
by skobes
Tue Aug 10, 2021 7:55 pm
Forum: Canada / United States Tax & Accounting
Topic: TFSA Form 3520 - US agent?
Replies: 2
Views: 2804

TFSA Form 3520 - US agent?

Form 3520 Line 3 and Form 3520-A Line 2 ask whether a foreign trust appointed a "U.S. agent", which instructions describe as someone who "has a binding contract ... to act as the trust's authorized U.S. agent ... with respect to [requests by the IRS for records or testimony]". Ho...
by skobes
Tue Sep 22, 2020 5:04 pm
Forum: Canada / United States Tax & Accounting
Topic: QEF dividends
Replies: 5
Views: 3140

Re: QEF dividends

Yes that helps, thanks. > effectively, you are still counting that income, but is only when you sell that it affects you Perhaps you didn't mean this, but for maximum clarity: it's not as if the tax on the dividend is deferred until sale. Distributions reduce basis, but the pro rata earnings increas...
by skobes
Sat Sep 05, 2020 1:48 pm
Forum: Canada / United States Tax & Accounting
Topic: QEF dividends
Replies: 5
Views: 3140

Re: QEF dividends

Thanks. To be clear: you are saying to leave it off of Schedule B entirely?
by skobes
Wed Aug 19, 2020 2:03 pm
Forum: Canada / United States Tax & Accounting
Topic: QEF dividends
Replies: 5
Views: 3140

QEF dividends

Suppose a US person holds shares of a PFIC (such as a Canadian ETF) that is a pedigreed QEF, and some of its ordinary earnings are distributed as dividends during the year. Should those dividends be reported on Schedule B? If so, how do you avoid the redundant inclusion of income between - 8621 Line...
by skobes
Sat Apr 06, 2019 2:36 pm
Forum: Canada / United States Tax & Accounting
Topic: FEIE - increasing my tax burden?
Replies: 9
Views: 3687

Re: FEIE - increasing my tax burden?

All of the US tax *on the CA-source income* is reclaimed by US FTC (assuming you pay more CA tax on the same income). The "limit" you refer to is the separation of US tax on CA-source income, from US tax on US-source income. You will still have a higher effective rate than a hypothetical 1...
by skobes
Fri Apr 05, 2019 5:22 pm
Forum: Canada / United States Tax & Accounting
Topic: FEIE - increasing my tax burden?
Replies: 9
Views: 3687

Re: FEIE - increasing my tax burden?

cosurshe: I also found, to some surprise, that FEIE was very disadvantageous, compared to not taking it. The reason is that it is not an "exclusion" in any reasonable sense of the word. Have a look at the Foreign Earned Income Tax Worksheet in the instructions for 1040 line 44. It works as...