Canadian moving to USA

sam75 · Post by **sam75** » Sat May 21, 2005 9:50 pm

Hello, I just came across this website, went through some posts and found a wealth of information from others. I immidiately registered. This is my first post and I have so many questions, if duplicate or stupid pl. forgive me in advance.

I am expecting to move to states on marriage based immigration in July or august. Here are some of the pressing questions that I have:

1) First of all, do I have to do anything at this point e.g. fill out any form?

2) I believe that I have to fill out the tax return for year 2005 in 2006 because I earned employment income for 2005, but do I have to fill out tax returns for the following years? I would like to keep my status in Canada active too.

3) My wife (USC) and I are expecting a child, and I am planning to take time off on parental leave. Can I collect EI - parental for the 35 weeks, and if I get settled in USA, come back and resign the job?

4) I have RRSP in Canadian Bank that I want to cash out and move with me. Do, I have to pay taxes on RRSP cashing out, if so any tips to avoid paying taxes? Or Can I move to 401K plan directly? (without paying taxes)

5) My employer has a pension plan for employees which holds accumulated money on my name. Now, if I leave my job, my employer will give me the "pension-plan" as a lumpsum amount to be deposited as a lock-in RRSP. Is there anyway I can cash out that lock-in RRSP or transfer to US 401K plan? (without paying taxes)

6) I have a house that I will sell in Sept./Oct time frame, do I have to pay taxes since the property appericiated quite a bit?

7) Do I have to report on the US Tax return about the transfer of monetory funds above $10K and do I have to pay tax on that amount?

Thanks in advance

nelsona · Post by **nelsona** » Sun May 22, 2005 10:44 pm

You had best read the "Emigrants" and "Non-Residents" guides from CRA.

You do NOT have to submit NR73. You should read it to be sure that you are breaking ties sufficiently.

I'm not sure what you mean by "status" in Cnada, and why you would want to keep it.

But, merely filing a tax return, when you don't live in Canada, and don't have dependants in Canada, won't keep any status alive.

Unlike regular EI benefits, you are allowed to collect mat/pat benefits while outside canada, even permanently, so long as you begin the process while in Canada.

One cannot move RRSPs to 401(k0. your chioce is to cash out, paying Cdn tax, or leaving them as RRSPs.

If your pension is an Ontario-regulated pension plan, no. Otherwise, probably, after you become non-resident.

Your house, if it was your principal residence, will not incur any Cdn tax if sold wihin one year of leaving Canada, and no US tax if sold within 3 years of leaving Canada.

There is no transfer tax on money in US or Canada.

nelsona non grata... and non pro

sam75 · Post by **sam75** » Sat May 28, 2005 4:04 pm

Thanks Nelsona for the response. The reason why I mentioned status in Canada because of keeping RRSP and some funds as well as Stocks active in Canada. So, I would like to move to states on PR but also wanted to keep my ties with Canada if it is possible for time being. I am not sure if I will be entitled for CPP/OAS when I retire in USA.

About the RRSP, do you know how I can break the lock-in RRSP? My F. institution is flexible in case if its regular RRSP account. Can I withdraw from my RRSP each year equal to the standard deductions/credits per person, so that I can avoid paying taxes?

nelsona · Post by **nelsona** » Sun May 29, 2005 5:06 pm

<blockquote id="quote">quote:<hr height="1" noshade id="quote">mentioned status in Canada because of keeping RRSP and some funds as well as Stocks active in Canada<hr height="1" noshade id="quote"></blockquote id="quote">

Being physically in US, regardless of your Cdn status, prevents you from managing your non-RRSP accounts, and may prevent you from manging your RRSP. This doesn't mean you have to sell, just that active trading is forbidden. Your broker will inform you.

<blockquote id="quote">quote:<hr height="1" noshade id="quote">About the RRSP, do you know how I can break the lock-in RRSP?<hr height="1" noshade id="quote"></blockquote id="quote">

You need to establish Cdn non-residency, and the rules in province under which your lock-in was made needs to allow this.

<blockquote id="quote">quote:<hr height="1" noshade id="quote">Can I withdraw from my RRSP each year equal to the standard deductions/credits per person, so that I can avoid paying taxes? <hr height="1" noshade id="quote"></blockquote id="quote">

To avoid tax, you must not be earning much money ANYWHERE, not just Canada. Otherwise 25% tax will be your rate in Canada even onb a $100 withdrawal. If you earn little money elsewhere, a 217 return can reduce the tax, but you would report ALL income to determine the Cdn tax on your RRSP withdrawal.

nelsona non grata... and non pro