US non-residents and their 401K accounts south the border

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JustAGuy
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US non-residents and their 401K accounts south the border

Post by JustAGuy » Tue Mar 06, 2018 12:18 pm

Hello,

Firstly awesome forum- lots of valuable info.

Story of my life - Was on H1B in the US for 8 yrs. Opened 401K with ex-employee. Then moved to Canada on PR. 401K stayed behind (of course). Became a Canadian citizen. Now would like to move my 401K into Self directed IRA (eg TD Ameritrade ) while sitting here in Canada. Questions -

1. Is there any special action needed from IRA perspective to make this 401K to IRA move? (Esp. for canadian citizen)

2. TD Ameritrade already confirmed that a Canadian can very much open Self directed IRA. But suggested to run this by a tax consultant.

3. Is there any special paperwork needed from CRA side? The capital gains in 401K/IRA are ofcourse like RRSP and will be taxed on withdrawal. But not sure if CRA sees it that way.

4. Has anyone already done this before?

Thanks in advance.

nelsona
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Post by nelsona » Tue Mar 06, 2018 1:22 pm

There is no papaerwork needed for CRA except if you have a Roth or Roth401(k), otherwise, you simply report income when you take ou.

The big hurdle is finding a US company will to deal with you, If you have, then you are good to go.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

JustAGuy
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Post by JustAGuy » Tue Mar 06, 2018 2:12 pm

***CORRECTION**


1. Is there any special action needed from **IRS - Internal Revenue Services** perspective to make this 401K to IRA move? (Esp. for canadian citizen)

Also - Thanks Nelsona for your response.

nelsona
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Post by nelsona » Tue Mar 06, 2018 5:21 pm

No. If there is, the brokerage will take care of it. But transfers are not considered income.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

rihyk
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Re: US non-residents and their 401K accounts south the border

Post by rihyk » Wed Feb 19, 2020 3:26 am

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xatham
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Re: US non-residents and their 401K accounts south the border

Post by xatham » Thu Jun 18, 2020 10:45 am

Resurrecting this old thread -

Do I understand correctly that a 401K-to-IRA transfer (and 401K roth to roth IRA) can be effectuated once you're a canadian resident, and this won't count as income or have to be reported?

nelsona
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Re: US non-residents and their 401K accounts south the border

Post by nelsona » Thu Jun 18, 2020 3:24 pm

Yes, but MOST if not all brokerages will not deal with new customers once they leave US, so this is best done before leaving US.
But in any event, such transfers would not be considered a taxable event in either country.

A 401(K) to a Roth would of course be considered income, and one would not want to do this while a Cdn resident, fpr tax reasons as well as "breaking " the tax-free Roth.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

xatham
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Re: US non-residents and their 401K accounts south the border

Post by xatham » Thu Jun 18, 2020 4:04 pm

>Yes, but MOST if not all brokerages will not deal with new customers once they leave US, so this is best done before leaving US.

What if you open the account at the new brokerage (IRA, Roth etc) and only transfer afterwards?

I ask because according to the entity that administers my 401K, it will take up to 8 weeks for them to aknowledge my termination, and I can't stick around in the US that long. They say they will let me keep my funds there as a non-resident, but I have >30 years before I retire. I'd rather deal with a larger outfit like Fidelity or Schwab that won't change its mind in 10 years and cut me a check.

>A 401(K) to a Roth would of course be considered income, and one would not want to do this while a Cdn resident, fpr tax reasons as well as "breaking " the tax-free Roth.

I was talking about 401(K) Roth to Roth IRA - both are Roth in this case.

nelsona
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Re: US non-residents and their 401K accounts south the border

Post by nelsona » Fri Jun 19, 2020 2:49 am

That shoud be fine, but you really need to check with the firm before leaving.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

xatham
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Re: US non-residents and their 401K accounts south the border

Post by xatham » Mon Jun 22, 2020 1:08 pm

Do you know brokerages that will maintain existing customers who later become non-residents?

I heard of Schwab and Fidelity, but perhaps you know others?

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