Another Canadian moving to California. Input is appreciated

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minster
Posts: 29
Joined: Mon Aug 15, 2016 11:35 pm

Another Canadian moving to California. Input is appreciated

Post by minster » Mon Aug 15, 2016 11:47 pm

First time posting here. I got referred to from another forum to be able to help me out. I have read a few thread about Canadians moving to the U.S. but I wanted to lay out my own personal situation to make sure I didn’t miss anything.

My situation:
I am moving from Canada (Quebec) to California at the end of September for a job offer. The long term plan is not yet established, but we will be staying there for at least 1-2 years to see how we like it. I have ordered The Canadian in America book that I should receive this week to help me out.

I currently have in Canada: RRSPs, TFSA, Non Registered. I use various institutions such as Questrade, RBC, National Bank. I follow mostly the couch potato strategy.

Here is a breakdown of my holdings per account:
RRSP (Questrade): VXUS, VTI, TD, VAB.TO, XRB.TO
RRSP (RBC): US Index Mutual Fund, International Index Mutual Fund
RRSP (National Bank): Canadian Money Market Fund
TFSA (Questrade): ZCN.TO, ZRE.TO, XBB.TO
Non-Registered (Questrade): ZCN.TO

Here are some of my questions:

1. Do i get rid of all my Canadian ETFs and Mutual Funds? I read about the tax on Passive Foreign Investment Companies (PFIC), and how it’s hell to fill out those forms. Also reading articles on them, it mentions that it’s safe to hold them in my RRSP, but is this really true even if I am in California, since California doesn't recognize RRSPs as a special account.

2. I am thinking of selling all my RRSP investments that have capital gains, and then repurchasing them. This will allow them to minimize capital gains when selling the assets when they are in the U.S. Is this worth it for someone like me? Or just people who are sure they are staying very long (or even retiring) in the US?
Also If i go about doing this, do I buy my assets back right away, or I wait until I am a U.S. citizen?

3. Can i keep my Questrade account and keep trading with it even when I am a U.S. citizen? Any impact I should be aware of?

4. So, what can I do with my Canadian cash? Lets say I sell off the mutual funds I have in RBC. Is is better to buy something else within RBC? Or transfer everything to Questrade so everything is in one place? I know this is a vague question that I should do more research on.

5. Do i need to top up my RRSPs before I leave or can i do it at the contribution limit date? Also, can i contribute to RRSPs the next year as well?

6. My new company will be applying for an H1-B for me and the equivalent for my wife. They said they would apply for a Green Card so that my wife is able to work after about 1.5 yrs. I am getting a bit scared reading all the nightmare stories about having a green card and returning back to live in Canada. Any thought on this?

Any other investment ideas or ways to save taxes?
Should i hire a cross border tax specialist? recommendations?
Tips for Canadians moving to the U.S.?

Some i know of:
Get SSN and licence (need to repass test) right away
Start building credit right away. I’ll go to RBC branch to see if they can open me a US RBC Account.

I know this is a huge post with a ton of questions, but any help is greatly appreciated for this stressful move.

nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona » Tue Aug 16, 2016 9:02 am

1. Since (a) a Cdn broker cannot maintain your non-registered accounts while you live in US, and (c) you will be subject to deemed disposition when you leave, and (c) the mutual funds can't be transferred to a US broker, and (d) they will be subject to PFIC rules, you are better off selling those outside your RRSP before becoming US resident. Those in your RRSP are fine (while Cali may tax your RRSP internal income, they don't care about PFIC, that is only IRS).

2. Yes, this is called crystalizing your gains in your RRSP, and is always suggested, since the eventual taxation by IRS (and the immediate taxation by Cali) wil be based on the book value when you arrived in US. the higher the book value the better.

3. Questrade Canada cannot manage an account for anyone living in US, citizen or not. Btw, You will not be a US citizen for many years.

4. you should be moving your funds to US, so that you can invest in tax-advantaged instruments in US, since that is where you will be taxed.

5. You will have to move your RRSP, before you move, to a firm that will allow management once in US. RBC does not. Quiestrade might, you need to check with them. Most will not accept new contributions after becoming US resident, so you might want to top up your RRSP now. There is no point to funding an RRSP if you are no longer taxable in Canada.

6. You are a long, long way from Green card. I hope that they will start GC process while you are on TN, long before you get H1, since this is a lottery these days.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

minster
Posts: 29
Joined: Mon Aug 15, 2016 11:35 pm

Post by minster » Sun Aug 21, 2016 10:28 pm

[quote="nelsona"]1. Since (a) a Cdn broker cannot maintain your non-registered accounts while you live in US, and (c) you will be subject to deemed disposition when you leave, and (c) the mutual funds can't be transferred to a US broker, and (d) they will be subject to PFIC rules, you are better off selling those outside your RRSP before becoming US resident. Those in your RRSP are fine (while Cali may tax your RRSP internal income, they don't care about PFIC, that is only IRS).[/quote]

Great. This perfectly answers one of my biggest concerns regarding having my ETFs in my RRSPs.

[quote="nelsona"]
3. Questrade Canada cannot manage an account for anyone living in US, citizen or not. Btw, You will not be a US citizen for many years.[/quote]

Sorry I messed up my question, what i meant to say is once I move the US and become a resident, can i keep my Questrade account and keep trading with it.

[quote="nelsona"]
6. You are a long, long way from Green card. I hope that they will start GC process while you are on TN, long before you get H1, since this is a lottery these days.
[/quote]
Yes they will start the process as soon as I am on the TN!

Zak Clements
Posts: 3
Joined: Thu May 28, 2020 3:07 am

Re: Another Canadian moving to California. Input is appreciated

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