Love the forum, lots of helpful information here. Few questions and clarifications:
I entered the US on Feb. 20th, 2006 on a TN VISA with my spouse. I have no property or dependents in Canada; however, I kept my RBC bank accounts in order to maintain a line of credit. Since that date, all my income has been from a US source and (of course) I am being taxed by the IRS.
As I understand, on Feb 20th I became a non-resident of Canada. Therefore, I should file a Canadian departure return and pay taxes on the Canadian income I made from Jan-Feb 2006. In addition, I should file a US return listing my world income for 2006 (Canadian + US) and use any Canadian tax as a foreign tax credit.
1) Am I correct in my interpretation of my status as non-resident? (And what is a *deemed* non-resident?)
2) Should I file a NR73 form or is my departing tax return enough? (I have already changed my address with the CRA and this form seems to be deliberately murky.)
3) Anything else I'm missing here?
Thanks to Nelson or anyone else for feedback,
Dave
TN Resident Status
Moderator: Mark T Serbinski CA CPA
1. Yes. A deemed non-resident would have lots of ties in Canada, but MORE in US. You do not have sufficient ties incanada, and are thus a pure non-resident, departing in Feb.
2. No.
3. Not really, other than that you can exempt your Cdn wages with form 2555 rather than use foreign tax credit. Use foreign tax credit on other Cdn income/taxes.
2. No.
3. Not really, other than that you can exempt your Cdn wages with form 2555 rather than use foreign tax credit. Use foreign tax credit on other Cdn income/taxes.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
Follow-up gift question
Thank you for your prompt reply. You're an amazing resource to say the least.
I'll take your advice regarding the 2555 form and use my foreign tax credit for reporting the 25% tax incurred upon closing my Canadian RRSP.
One unrelated follow-up question:
In the 2007 taxation year, I will be receiving a monetary gift from my Canadian step mom that I will report using form 3520 (from my father's life insurance, sadly).
Obviously I will report this to the IRS to avoid any penalties, which are substantial.
However, am I correct that this is still not taxable on my end? I'm just curious why the IRS wants you to report large gifts if they aren't going to try to get their hands on it.
Thanks again, I do appreciate your help.
Dave
I'll take your advice regarding the 2555 form and use my foreign tax credit for reporting the 25% tax incurred upon closing my Canadian RRSP.
One unrelated follow-up question:
In the 2007 taxation year, I will be receiving a monetary gift from my Canadian step mom that I will report using form 3520 (from my father's life insurance, sadly).
Obviously I will report this to the IRS to avoid any penalties, which are substantial.
However, am I correct that this is still not taxable on my end? I'm just curious why the IRS wants you to report large gifts if they aren't going to try to get their hands on it.
Thanks again, I do appreciate your help.
Dave
Remember o use form 8891 to report your RRSP and TD form to report all your foreign accounts that you held during the year.
Remember too, that you aretaxable in US on any income from your RRSP frm the time you become resident, which, if you file full-year 1040, is Jan 01, 2006. This would iclude any cap gaind made from sales at withdrawal.
Threr wil be no tax on your gift. IRS likes to make sure that they know where your off-shore money is coming from.
Remember too, that you aretaxable in US on any income from your RRSP frm the time you become resident, which, if you file full-year 1040, is Jan 01, 2006. This would iclude any cap gaind made from sales at withdrawal.
Threr wil be no tax on your gift. IRS likes to make sure that they know where your off-shore money is coming from.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Oh heck, I just efiled last night and now I see this: http://www.allbusiness.com/marketing-ad ... 982-1.html I guess I have to ammend the return now. grr.
Sorry to post again, but editing is not possible and it's still on topic for the thread :)
Most links are saying that in 1996 a law was enacted to require on form 3520 reporting of a gift from a foreign person to a US person if that amount went above $10k, even if it's not taxable, otherwise major, awful penalties. However, a couple of links go further, as form 3520 seems to itself, saying that if the money is from a foreign trust over $10k it has to be reported, but if it's from a foreign person, the threshold is $100k, meaning if Bob, a US resident, receives $95,000 from Jane, a Canadian person, then he does not have to let IRS know at all. Is that so?
Most links are saying that in 1996 a law was enacted to require on form 3520 reporting of a gift from a foreign person to a US person if that amount went above $10k, even if it's not taxable, otherwise major, awful penalties. However, a couple of links go further, as form 3520 seems to itself, saying that if the money is from a foreign trust over $10k it has to be reported, but if it's from a foreign person, the threshold is $100k, meaning if Bob, a US resident, receives $95,000 from Jane, a Canadian person, then he does not have to let IRS know at all. Is that so?