Elect to defer Cdn taxes on IRA?

This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.

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nelsona
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Re: Elect to defer Cdn taxes on IRA?

Post by nelsona » Tue Oct 16, 2018 9:31 pm

4. Bank Interest is not reportable on 1040NR. US Dividends should be flat taxed by your Cdn broker, so will not need to be reported. Stock sales are not reported to IRS by Cdn residents. Roth income is not reported to CRA. IRA income should be flat taxed withheld and need not be reported on 1040NR if withheld correctly. IRA income and non-qualified HSA would be reported to CRA.

5. Your 1040NR will do.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

brianbbc
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Joined: Fri Apr 25, 2014 9:17 pm

Re: Elect to defer Cdn taxes on IRA?

Post by brianbbc » Wed Oct 17, 2018 5:19 pm

It seems one answer leads to another question.

As resident of Canada, I will not be subject to taxation on sale of mutual funds/stock and bank interest for US based accounts to the IRS for taxable accounts. BUT, I spoke with my US broker and explained my situation. As a non-US resident (they liked the term NR alien), I am to file a w-8 ben with them, then I will sell my stocks/mutual funds. I am planning to submit the w8-ben jan 02, wait the change occurs in their system, then liquidate all my taxable asset holdings and have the cash transferred to Canada.

the problem is they said they would issue form 1042-s on the sale, and submit the form to the IRS. I believe you stated that I do not have to report the sale of any stock/mutual funds on the 1040nr. Should I be concerned about the 1042-s or it is just an accounting procedure and in reality, I do not have to file a 1040nr (since I filed a w-8 ben) at all, if that is the only taxable event from the US that year?

nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
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Re: Elect to defer Cdn taxes on IRA?

Post by nelsona » Thu Oct 18, 2018 7:54 am

I try not to spoonfeed. I think you can figure out. No need to ask more than once.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

donna753
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Joined: Tue Aug 18, 2020 9:39 am

Re: Elect to defer Cdn taxes on IRA?

Post by donna753 » Tue Aug 18, 2020 12:15 pm

I read here https://www.moodystax.com/challenges-ca ... lans-rrsp/
that "amounts contributed to a 401(k) by a Canadian retiree who was enrolled under his US employer’s plan while he was resident in Canada may be withdrawn as tax-free 401(k) distributions for Canadian tax purposes, provided the amounts were never claimed as deductions by the individual on his Canadian tax return." I believe contributions to 401(k) by Canadian residents before December 31, 2008 is not deductible on the Canadian income tax return. Does that mean 401(k) contributions made before that date is tax free upon withdrawal? Any insights are greatly appreciated. Thanks a lot!

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

Re: Elect to defer Cdn taxes on IRA?

Post by nelsona » Wed Aug 19, 2020 2:34 pm

You should not have to report ANY income from before arrival in canada on your T1, unless you would have had to report this in any event. This would only be Cdn source employment income, and sale of a Cdn property, all other Cdn-source income would have been taken care of by flat non-resident tax, or be tax exempt.

You may be asked by other means (like CCB application) to provide your pre-arrival world income, but not on your T1 -- and it would have nothing to do with source or type of income.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

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