Corporate structure for US/CA Citizen

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taxquestions
Posts: 42
Joined: Tue Dec 18, 2018 6:31 pm

Corporate structure for US/CA Citizen

Post by taxquestions »

Current scenario:
•$150,000 CAD yr taxable sole-prop income (Canadian sourced)
•US/CA citizen
•Canadian resident

Wishful scenario:
•Canadian Corp (SBD) tax rate (15%)
•$47,630 Non-Eligible Dividend Salary (6.87%)

Not sure if Canadian Corp is viable because CFC and Subpart F / GILTI tax. With "current scenario" whats the most economical tax strategy? Is a Canadian Corp still advantageous tax wise?
Rampant
Posts: 2
Joined: Tue Feb 26, 2019 9:47 am

Re: Corporate structure for US/CA Citizen

Post by Rampant »

I have a similar scenario that I'm trying to evaluate; I realize for filing/organizing I'll be enlisting professional help but I wanted to get the broad strokes on if my US citizenship will complicate or neutralize the advantages of incorporating.

$350,000 CAD /yr total between two clients, both Canadian sourced.
US/CAN citizen.
Canadian Resident.

Ideally I'd incorporate, pay myself a modest T4 salary from the corporation, take a portion of corporate profits as dividends, push a bunch of my self-employment costs to the corp, etc. My question is while I'm familiar with reporting Canadian income and tax paid to the IRS and utilizing the foreign tax credit/earned income exclusion, I'm not sure if there are any US tax rules on those CCPC non-eligible dividends that negate or cut in to the advantage on the Canadian side.

Thanks.
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