Dual citizen receiving Cdn pension living in US. and holding RRSPs in Canada.
Two questions:
1. Is there any way to recoup the Cdn tax paid on my pension using the foreign tax credit rather than claiming the Cdn tax as an itemized expense, since the latter would recoup only about 25 to 30 cents on the dollar vs. full recovery.
2. Gradual withdrawal of RRSPs -- I could at some point convert to RRIF to pay a smaller withholding tax on withdrawals, but I'd prefer to get control over the funds sooner, since TDW online broker accounts totally rip you off coming and going on the exchange rates anytime you make US-Cdn trades. Question is, is there any possible way to use the foreign tax credit. I understand it would be difficult, but are there specialists around or advice available as to finding a way?
Foreign tax credit vs. Foreign tax expense
Moderator: Mark T Serbinski CA CPA
I presume you are asking how to get the FULL credit for your Cdn tax, since you most certainly can use the credit, but it will invariably end up being only partially used.
The short answer is that you must carryforward the unused amount, and try to create Cdn income in the same gen limit category on which little or no Cdn tax is owed.
One way is to reduce the tax on your RRSP by making it into a RRIf, or by section 217 if not working.. nOT PRACTICAL unless not working. The other way is to generate some Cdn wages, less that $10,000 per year, which is not taxable in Canada by treaty. This would get you $10,000 foreign to add to your return, and be eligible for foreign tax credit.
The short answer is that you must carryforward the unused amount, and try to create Cdn income in the same gen limit category on which little or no Cdn tax is owed.
One way is to reduce the tax on your RRSP by making it into a RRIf, or by section 217 if not working.. nOT PRACTICAL unless not working. The other way is to generate some Cdn wages, less that $10,000 per year, which is not taxable in Canada by treaty. This would get you $10,000 foreign to add to your return, and be eligible for foreign tax credit.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
And why you would have US securities in your RRSP is beyond me.
You are already tied to the US economy thru your job, your savings and your US pension, so why on earth would you put MORE of your money in it?
Invest in Cdn or other non-US investments in your RRSP, now that the foreign limits have been removed.
And don't trade so much. Then exchange rates won't matter.
You are already tied to the US economy thru your job, your savings and your US pension, so why on earth would you put MORE of your money in it?
Invest in Cdn or other non-US investments in your RRSP, now that the foreign limits have been removed.
And don't trade so much. Then exchange rates won't matter.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
[quote="nelsona"]And why you would have US securities in your RRSP is beyond me.
I'd invest anywhere in the world where the potential returns look most favorable. Most of my investable assets are unfortunately tied up in Canadian RRSPs. The investment opportunities, available research and liquidity in the markets is much better in the US and elsewhere than in Canada.
You are already tied to the US economy thru your job, your savings and your US pension, so why on earth would you put MORE of your money in it?
I'm retired, with bulk of investable assets in the RRSPs. Considering total assets (including home equity), I'm about 40/60 US and Canada. But the opportunities to invest in non-resource based investments are greater in the US. I do like the resource-based opps in Canada, like oilsands, uranium, gold and silver, tho the Cdn govt burned everybody last year on the CanRoys sudden change in tax rate.
Invest in Cdn or other non-US investments in your RRSP, now that the foreign limits have been removed.
From the day I started working, I figured it would be my responsibility to provide for my retirement because it was apparent even 40 years ago that social security and social insurance and government medical insurance were unsustainably large unfunded liabilities. That's what drove me nuts about the foreign limits on the RRSPs -- why force CDN citizens to restrict their retirement investments to 3% of the world's opportunities. It had to change, and finally somebody with some wisdom in the Tax Policy division finally prevailed last year.
And don't trade so much. Then exchange rates won't matter.[/quote]
Don't know whether you've got tongue in cheek here <ggg>, but ya gotta go where the opportunities are -- and TDW would ding you coming and going on the exchange rates ANYwhere outside Canada, not just US.
It's interesting that there is a gigantic class-action lawsuit against major credit card companies ripping off US citizens on exchange rates when they traveled to foreign countries between 1976 and 2004 (?), while using their credit cards. I would LOVE it if somebody within Canada would bring a class-action against TDW, because their practice on exchange conversions is even more flagrant.
I'd invest anywhere in the world where the potential returns look most favorable. Most of my investable assets are unfortunately tied up in Canadian RRSPs. The investment opportunities, available research and liquidity in the markets is much better in the US and elsewhere than in Canada.
You are already tied to the US economy thru your job, your savings and your US pension, so why on earth would you put MORE of your money in it?
I'm retired, with bulk of investable assets in the RRSPs. Considering total assets (including home equity), I'm about 40/60 US and Canada. But the opportunities to invest in non-resource based investments are greater in the US. I do like the resource-based opps in Canada, like oilsands, uranium, gold and silver, tho the Cdn govt burned everybody last year on the CanRoys sudden change in tax rate.
Invest in Cdn or other non-US investments in your RRSP, now that the foreign limits have been removed.
From the day I started working, I figured it would be my responsibility to provide for my retirement because it was apparent even 40 years ago that social security and social insurance and government medical insurance were unsustainably large unfunded liabilities. That's what drove me nuts about the foreign limits on the RRSPs -- why force CDN citizens to restrict their retirement investments to 3% of the world's opportunities. It had to change, and finally somebody with some wisdom in the Tax Policy division finally prevailed last year.
And don't trade so much. Then exchange rates won't matter.[/quote]
Don't know whether you've got tongue in cheek here <ggg>, but ya gotta go where the opportunities are -- and TDW would ding you coming and going on the exchange rates ANYwhere outside Canada, not just US.
It's interesting that there is a gigantic class-action lawsuit against major credit card companies ripping off US citizens on exchange rates when they traveled to foreign countries between 1976 and 2004 (?), while using their credit cards. I would LOVE it if somebody within Canada would bring a class-action against TDW, because their practice on exchange conversions is even more flagrant.
The vehicles available to your RRSP extend FAR outside US, and are almost all available in C$.
And I'm sure your brokerage fees are much more than your exchage fees.
Sounds like you are worrying about the wrong thing. If you overinvested in US market, taht is not TDW's fault. Almost ANY euro fund has outperformed US.
And I'm sure your brokerage fees are much more than your exchage fees.
Sounds like you are worrying about the wrong thing. If you overinvested in US market, taht is not TDW's fault. Almost ANY euro fund has outperformed US.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best