Canadian moving to US soon - need advice

Vancity · Post by **Vancity** » Sat Mar 19, 2011 9:37 pm

This site is an excellent resource and I am so thankful that I found it. I've been reading for hours and taking notes. That being said, I wanted to run my situation by the experts here and make sure I'm made the correct assumptions and set myself up for success. If this is a lot of info to get back to me on I am fine with compensating someone for their time to provide advice.

Situation
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i) Canadian citizen acquiring TN status within 2-3 months in Washington state
ii) getting married in October of 2011
iii) own property here in Canada
iv) wife staying in Canada to live/work until October at which point she will join me in the US under a TD visa
v) we both have TFSAs with substantial non-income generating Canadian holdings in them (presently 200K each likely to grow to 500K each)
vi) usual smattering of registered and non-registered accounts
vii) returning to Canada within 4-5 years

Assumptions
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i) Keeping the property in Canada means that I am still a Canadian resident for taxation purposes (ie. must report foreign income to CRA and pay additional tax not covered by tax credits). This route means any lower income tax advantage of working in the US is essentially erased.

ii) Renting the property in Canada may demonstrate that I/we are non-residents which may be inconsistent with my TN status.

iii) If I/we become non-residents, there may be significant tax liabilities in Canada (capital gains on property, etc).

iv) Reporting the TFSA to the IRS is complicated and although the value of the holdings may increase, as long as I do not realize a gain while in the US, that gain is not taxable by the IRS.

v) Staying in the US under a TD visa while looking for H-1B sponsorship is discouraged.

Questions
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i) Since my future wife is living/working almost the entire year in Canada, would it even be advisable to mention her on the first 1040 I file? She would be a non-resident and no part of her income is from US sources so why even mention her?

ii) Is my objective to become a Canadian non-resident in order to reduce taxes or remain a Canadian resident as part of TN status requirements? My situation seems less complicated if I remain a Canadian resident (although I pay more tax).

iii) How long would I have to wait after leaving the US to withdraw from the TFSA for them to be out of reach by the IRS? In other words, if I leave the US permanently on Monday could I cash out everything on Tuesday tax-free or would I have to wait until the following year?

iv) Don't the tax treaty agreements between the US and Canada mean that I can only be considered a resident in one of these countries? Is it more advantageous to be a US resident or non-resident when it comes to tax-time?

Any insight, advice or recommendations are very very much appreciated. Again, I'm willing to pay someone for their professional opinion, so if you are that someone or know someone, pass along their info. Thanks!

Vancity · Post by **Vancity** » Sat Mar 19, 2011 10:32 pm

Doing some more reading - it looks like as soon as my wife joins me in the US while I'm on my TN, I will become a non-resident of Canada.

That means capital gains on the house, liquidating non-registered accounts, liquidating the TFSA, freezing the RRSPs for a while, etc. Is this right?

Anyway to avoid this? Ask my future wife to stay in Canada for 4-5 years? :)

Vancity · Post by **Vancity** » Sat Mar 19, 2011 11:10 pm

Shoot, cannot edit my previous posts. Canadian real property (ie. house) is not subject to deemed disposition - so I would not have to dispose of it when I leave. Pretty much everything else though would have to go I believe.