My husband works in USA on H1B. He has a TFSA in 2015 and 2016. I also made him a joint account holder on my non-registered saving account (I made 100% contribution) in 2015 and 2016. No investment on these accounts, just back interest. He files his US tax as resident, but did not realized that he need to claim these accounts until this year.... So he closed all his account in Canada recently. He will file the FBAR form now. A few questions for help please
(1) How should he claim his TFSA? No investment at all, just a few hundred dollars interest. CRA website says there are three types of TFSA: deposits, annuity contracts, or an arrangement in trust. I believe his falls under deposits. So he doesn't need to file 3520/3520A, right? Just claim the interest as a foreign income on 1099?
(2) The joint account is also bank interest only. Since I made 100% contribution, I report 100% of the interest on my tax to CRA. In this case, my husband doesn't need to report the interest to his tax to IRS, correct?
(3) Will there be a penalty because he did not file the FBAR 2015 tax year (accounts balance over 10K? He did not know this at all. He basically thought that world wide income in for green card holder, and this is tax-free in Canada...
Thanks!
Reporting TFSA, non-registered joint acount ..
Moderator: Mark T Serbinski CA CPA
Hello Xiaoice,
(1) as long as you are sure it is a bank TFSA, then 3520/3520A shouldn't be necessary. Look in the documentation, does anything say "declaration of trust"?
(2) The IRS doesn't recognize the income attribution rules that the CRA does. Since you are married, what matters is if either or both of you reside in a "community property" state or country. Canada would be considered a community property jurisdiction. It is likely you each have to declare 50% of the income from the joint account.
(3) There shouldn't be any penalty since the reason for not filing was not knowing that it was required. Many on this site have faced this without penalty.
(1) as long as you are sure it is a bank TFSA, then 3520/3520A shouldn't be necessary. Look in the documentation, does anything say "declaration of trust"?
(2) The IRS doesn't recognize the income attribution rules that the CRA does. Since you are married, what matters is if either or both of you reside in a "community property" state or country. Canada would be considered a community property jurisdiction. It is likely you each have to declare 50% of the income from the joint account.
(3) There shouldn't be any penalty since the reason for not filing was not knowing that it was required. Many on this site have faced this without penalty.
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MGeorge is neither an accounting nor taxation professional.
MGeorge is neither an accounting nor taxation professional.