Dual Status & Residency

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Laura
Posts: 12
Joined: Sun Apr 03, 2005 11:45 am

Dual Status & Residency

Post by Laura »

I've been working on a TN and was commuting back and forth across the border until mid June of last year. I rented a place in the US and moved my stuff over. The US accountant I worked with said I didn't need to file a dual status return. He filed a straight 1040 on my behalf. He declared the RRSP account on my return but wasn't aware of the new form that just came out. He told me that I wouldn't need to file it. I am not convinced this was the right course. Any thoughts?

I still have some accounts, RSP, and credit cards in Canada (no dependents, no property, no spouse) -- would these affect my residency status when filing the Cdn return?

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

Post by nelsona »

You should file the new form, as I am unsure as to how 'he declared the RRSP', sine 8891 is now the only accepted manner.

As long as you reported ALL world income on the 1040, you are fine filing 1040 instead of dual-status.

You need to also file a departure return for Canada (departure mid-June), as how you file in US is meaningless to CRA.


<i>nelsona non grata... and non pro</i>
Laura
Posts: 12
Joined: Sun Apr 03, 2005 11:45 am

Post by Laura »

He filed a TD F 90-22.1 to declare the RRSP account. The chequing account was omitted (there's little to no interest accumulating in the account)
Laura
Posts: 12
Joined: Sun Apr 03, 2005 11:45 am

Post by Laura »

Sorry, what Cdn form is reserved for indicating departure date? The T1 doesn't give that option.

Thanks for your help!
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

The formt page on T1 asks you your departure date.

Your accountant is completely wronmg aboy how to report your foreign accounts.

First, as long as the sum of all your accounts is greater than $10K, they ALL have to be reported (the fact that some are small or don't generate income is meaningless -- either they ALL need reporting or none does).

And your RRSPs require MORE than the TD form, they require an election to defer taxation be made thru 8891.


And little or no interest is a big divide , no interst is no interest, not declaring a 'little" interst is tax evasion, any way you slice it.

I would not suggest you keep this guy on for much longer.



<i>nelsona non grata... and non pro</i>
Laura
Posts: 12
Joined: Sun Apr 03, 2005 11:45 am

Post by Laura »

I was looking at the T1 for non-residents -- it doesn't list a departure date field. So, I must file the regular T1 general.

I did not receive any statement of interest from my bank for the chequing account and I receive account information through the bank's web site -- checking this showed no interest deposits (the value is almost always under $1000). However, I will report this account anyway.

Regarding the 8891 form, I've received no distributions. However, under the line for "undistributed earnings," is this the same as "reinvested distributions" which appear on my RRSP statements?

Thanks for your input. The accountant is convinced that I don't need to file the 8891, which I brought to his attention. So, I ought to file it, along with an amended 1040X?

MaggieA
Posts: 150
Joined: Sun Oct 31, 2004 4:06 pm

Post by MaggieA »

Gosh Laura, are you sure this guy is an <i>accountant?</i>

The rules about when 8891 and TD F 90-22.1 have to be filed, and what has to be reported on them, are about as straightforward as US gov't can get. One can only assume this guy is inexperienced with customers having foreign accounts, and weak on reading directions.
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

Laura, you must still, fore 2004, use the T1 for your old province, as you wree not non-resident for the entire year.

You should look at the "Emigrants" guide from CRA.

... and since your acct is a moron, you will have to read instructions <i>carefully </i> on your own.

<i>nelsona non grata... and non pro</i>
Laura
Posts: 12
Joined: Sun Apr 03, 2005 11:45 am

Post by Laura »

Thanks for your feedback. I am making an appointment to see another tax specialist. I could have filed myself the way the first guy handled it.
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

I think you are probably wasting time/money/effort going to <i>SEE </i> another specialist.

Unless you live in one of the 2 or 3 cities in US that have a well-respected cross-border specialist, so are going to get unsatisfactory answers.

Better to <i>CONTACT</i> one that has an established practice (in US or Canada) that deals specifically with cross-border issues.

Accuracy is much more important that face-to-face.




<i>nelsona non grata... and non pro</i>
Laura
Posts: 12
Joined: Sun Apr 03, 2005 11:45 am

Post by Laura »

Thanks. I live fairly close to the border and so it's no effort to go back to Canada.
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