Dual citizen, tax and financial Question.

YellowKnife · Post by **YellowKnife** » Mon Jan 08, 2007 2:59 am

I am Canadian living in USA since 90. I am now an american citizen. I still have couple of accounts in Canada. One is RRSP and the other is a brokerage account. We are thinking of bringing the money in the brokerage account to here since we are finding it difficult to file taxes.

What are the tax implications of the money? I think it is under 400k. Is it worth it to leave the money there as it is been growing more there than here ? 400k canadian is like 320k USD and how much would the tax be on it ?

The biggest problem I find is filing the taxes. Declaring foreign income and filing taxes in Canada. I haven't been doing it for the last 5 years. Where do I start ? By this April, I want to be upto date on taxes. What forms do I need ?

thanks

nelsona · Post by **nelsona** » Mon Jan 08, 2007 9:57 am

Not quite sure what your question is. If you live in US, the only income that your brokerage account is generating that could be taxed in canada is interst and dividends. merely having this account does not in itself make you taxable in Canada, nor does the size of the account create any taxes.

You are not allowed to TRADE in the account, since you don't live in Canada.

You should have brought these funds down to US years ago. Assuming you paid any departure tax when you left, transferring stock to US should not incur any Cdn or US tax.

Your RRSP is fine where it is if you wish to leave it. Otherwise collapsde it and pay 25% Cdn tax, plus US tax on any groth since you became citizen/resident.

YellowKnife · Post by **YellowKnife** » Mon Jan 08, 2007 1:40 pm

Two part Question it was ..

I didn't pay any departure tax when I moved here. But I did declare the canadian accounts.

1. Right now, I use my sister's address for the brokerage account so I can sell or buy stock. I was wondering is it worth it to leave the account as it is or bring it down here if we are not going to move back to Canada in 3 years.

2. Assuming I do leave the brokerage account as it is, I need to do the tax work. I haven't been doing that for sometime now. Account has some mutual funds too. So it is dividends,interest and Cap Gains. I want to be upto date on the taxes. Can I start with 2006 taxes ? How do I back file the taxes ? Because
of the canadian account, my american taxes have been delayed. I have been filing extensions for the last 3 years. I want to finish everything before April 2007.

Please let know where to start.

thanks

nelsona · Post by **nelsona** » Mon Jan 08, 2007 1:57 pm

Well, you should have paid departure tax. I don't know what you mean by 'declare' the accounts. How? To whom/

1. This is illegal.

2. As I said, there are no capital gains issues because you do not live in Canada. Why would you still be paying taxes in canada?

YellowKnife · Post by **YellowKnife** » Tue Jan 09, 2007 1:18 am

Didn't know about departure tax. How do I make it legal now ? Can I get rid of that account and bring the money to USA ? If so, what would be the tax rate ?

What about declaring it on American taxes as a foreign income ?

nelsona · Post by **nelsona** » Tue Jan 09, 2007 8:39 am

Moving money from one country to another does not in itself produce taxable income. You should have been reporting any income from the brokerage account in US already, as you are taxable in US on your world income.

YellowKnife · Post by **YellowKnife** » Tue Jan 09, 2007 10:40 am

yep, that brings us to the original question. What forms do I need to report that on US taxes ? As I mentioned I have been filiing extensions from 2002 onwards. I have a huge backlog of taxes need to be done before April.

nelsona · Post by **nelsona** » Tue Jan 09, 2007 10:58 am

I'd suggest you seek professional advice at this point.