Moving from US to Canada

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ttiger
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Joined: Fri Sep 13, 2019 7:51 am

Moving from US to Canada

Post by ttiger »

My wife and I are both Australian citizens. I have been working in the US since 2017 on H1B. My wife does not have an EAD. We plan to move to Canada as new immigrants under EE FSW.

Would really appreciate if some one can share some advice on the following.

1) I prefer to work in the US, but I can work remotely from Canada if needed. If I choose to work remotely, I can stay on the US payroll, or be moved to the Canadian payroll. What would be better if there is a difference?

2) If I work most of the time in the US, can I be a deemed non-resident (CRA) even if my wife is a resident? If true, do I only need to report Canadian-sourced income to CRA? At the moment, both of us pass the substantial presence test. I probably will meet the substantial presence test in 2020, but my wife won't.

3) I know we can elect to file jointly to IRS even if she's a NRA. Does she still need to file to CRA if she does not generate any income in 2020?

4) Given the choice, should we move in December or January? (Or leaving the US on Dec 31st and arrive on Jan 1st?)

5) We have a joint ETF investment (since June 2018) with a net gain of ~$50K. Should we sell the investment and pay CGT before we move so we don't have to deal with ongoing paperwork? (We originally planned to hold them for 20+ years.)

6) Do I need to take any action on my 401(k)?

7) Right now, most of our other assets (except a car) are cash in joint accounts. I suppose to avoid complicated paperwork of reporting foreign accounts, we should close the joint accounts? Is it better to move the cash to my personal account in US or her personal account in Canada?

Any advice to some of the questions would be highly appreciated.
nelsona
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Re: Moving from US to Canada

Post by nelsona »

So she would be the skilled worker in Canada? Otherwise you can't move to Canada under that program and work in US, no?
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ttiger
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Joined: Fri Sep 13, 2019 7:51 am

Re: Moving from US to Canada

Post by ttiger »

[quote=nelsona post_id=55996 time=1568381249 user_id=30]
So she would be the skilled worker in Canada? Otherwise you can't move to Canada under that program and work in US, no?
[/quote]

Yes. She's the primary applicant under EE.
nelsona
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Re: Moving from US to Canada

Post by nelsona »

OK (don't use the quotes or cut and paste, just post your answers.

1. If you live and work in Canada, you need to be either on Cdn payroll set up, or be a contractor.
2. You could be considered non-resident, but your would have to severely limit your visits to Canada, with your spouse visiting you in US, not vice versa. And this *could* impact your Cdn immig process. SPT doesn't really enter into this, the treaty definition of residency is more important.
3. It is always advisable to file, in order to get benefits. Again, how would she not generate income if she is entering Canada on a work status?
4. Doesn't really matter.
5. Definitely do NOT sell before leaving US. You will not owe any US CGT if you are Cdn residents when you sell.
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nelsona
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Re: Moving from US to Canada

Post by nelsona »

6. Be sure that your 401(k) management allows for CDn residents. MANY do not.
7. Doesn't matter.
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nelsona
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Re: Moving from US to Canada

Post by nelsona »

So you need to decide where YOU want to live, and whether your spouse will live with you. That will determine how much change you need to make. You seem to be wanting to simply stay in US while she moves up to Canada.
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ttiger
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Re: Moving from US to Canada

Post by ttiger »

Thank you so much, nelsona.

A bit confused re answer #5. I suppose if we sell as Canadian residents, we are subject to CGT in Canada instead? Or are you suggesting the CRA cost basis would be the FMV on the day we move and therefore do not need to pay any CGT on the existing growth in both countries?

Yes, the plan is I'd live and work in the US in 2020 and reassess the situation before 2021.
nelsona
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Re: Moving from US to Canada

Post by nelsona »

The treaty provides that Cdn residents do not pay US cap gains tax.
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Seedron
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Re: Moving from US to Canada

Post by Seedron »

Is this a good deal for the Cdn residents?
nelsona
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Re: Moving from US to Canada

Post by nelsona »

Of course! it means gains made while living in US, and them moving to Canada are tax free in BOTH countries.

You cannot choose where gains will be taxed: they will be in your country of residence at moment you trigger them.
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lbeauvil
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Re: Moving from US to Canada

Post by lbeauvil »

Sorry to wake up an older post.

"The treaty provides that Cdn residents do not pay US cap gains tax."
Does that apply to US citizens living in Canada as well?

I am dual citizen (Canada/USA). I have been in the USA for 23 years and own some stocks with a ~$60k capital gain (acquired while living in USA). I will will retire and be moving to Canada in June. It seems that it would be a lot more advantageous to wait to be resident of Canada before selling if I do not have to pay US cap gains tax and benefit from the CRA cost basis adjustment.

Do I understand correctly?
Thanks
nelsona
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Re: Moving from US to Canada

Post by nelsona »

For US citizens, waiting to sell winners is not as advantageous as for Cdns, because you still need to report the entire gains when you sell on your 1040 whenever you do it. The notion that US citizens don't pay US cap gains when living in Canada is because the tax is credited. If you sell shortly after moving, you have no gains in Canada, so will have no credit to apply.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D
ND
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Re: Moving from US to Canada

Post by ND »

Also Contact Marc Pavlopoulos marc@syndesus.com to explore PEO
Syndesus is an Employer of Record (also known as a PEO – Professional Employer Service) in Canada who legally employs Canadians in Canada to work for US companies.

Syndesus collects and remits all Canadian employer and employee taxes to the CRA. You would get an offer letter from Syndesus which exactly mirrors what you have in the US. Which means you get a T4, and that you are eligible for provincial healthcare (because you are now a Canadian taxpayer). The US employer pays the monthly fee for its service. There is no cost to the Canadian worker.
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