US Citizen - Pending PR - Married to Canadian - What to Do with Accounts?

This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.

Moderator: Mark T Serbinski CA CPA

Post Reply
itsrb
Posts: 2
Joined: Wed May 26, 2021 2:40 pm

US Citizen - Pending PR - Married to Canadian - What to Do with Accounts?

Post by itsrb »

Recently joined, but did some research and see its the age old question on this board, but let me spell out the situation:

30s US Citizen
Applying and waiting on PR approval
Married to Canadian Citizen
Currently in BC for residency

Formerly residing in California
Bank accounts
Retirement accounts (401k/Roth/HSA)
Brokerage Accounts
All in US
No accounts short of a low dollar joint account in Canada

Employer is in California but has a Canadian entity and current plan is to transition me to be a Canadian employee despite doing no physical work/clients in Canada, but residing and working remotely.

I understand most of the salary taxation etc but Im most concerned about what happens/what to do with retirement/brokerage and future RSU vesting once Im "fully transitioned" to Canadian?

Would it be possible to leave my retirement accounts and brokerage accounts on hold in the US? Assuming I come back in a couple of years? MUST I convert them either all to Roth or bring over to Canada before transitioning over? Future contributions? Only RRSP/TFSA ? From what Ive read, I cannot contribute CAD to US Accounts.

Thank you for any information as Ive got to get moving on these items.
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: US Citizen - Pending PR - Married to Canadian - What to Do with Accounts?

Post by nelsona »

US retirement accounts can be kept in US, subject to the policies of the firm(s) you deal with. Many will not keep Cdn accountholdrs. This is something you check BEFORE moving.

Non-retirement investment accounts cannot be maintained for Cdn residents; you would need to transfer assets to a Cdn brokerage. US mutual funds would need to be sold.

Your question about needing to convert to Roth needs clarification. You are never obliged to convert to Roth. The reason it is suggested avoid future CDn taxation on your taxable retirement accounts, (paying tax now in US), This must be done before establishing CDn tax residency.
Be careful,from what you say you may already be a Cdn tax residnt, since you are present in Canada and your spouse is too.

Bank accounts can be kept.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: US Citizen - Pending PR - Married to Canadian - What to Do with Accounts?

Post by nelsona »

So, before you give up US residency, and before you establish Cdn tax resisncy, you need to
(a) determione if your current retirement accounts can be maintained (not just left in limbo, but fully tradeable) and if not find one that can be managed,
(b) decide if you want to convert any of these accounts to Roths, paying the tax now.
(c) sell any losing positions in your taxable accounts.

After moving, find a Cdn broker and have them do the transfer work for the non-retirement investments that can be transferred, and sell off those that cannot.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
itsrb
Posts: 2
Joined: Wed May 26, 2021 2:40 pm

Re: US Citizen - Pending PR - Married to Canadian - What to Do with Accounts?

Post by itsrb »

Very much appreciate the responses - thank you

So I have a couple of weeks to get my ducks in order and I will be looking at your recommendations to see what is feasible and what isnt. I really appreciate you spelling this out.

Assuming my accounts can be kept tradeable but not transacted on, I will leave them all there and follow through with my current Roth strategy. Reason being that I do plan to come back to US residency at some point in the next few years, Id hate to shake things up and be taxed exponentially more right now than needed.

IF they cannot, I will look to migrate them to another vendor.

re: Taxable account - yeah it seems like a hassle to move it over just to come back in a couple of years but Im assuming this is non-negotiable. Is there a reason that taxable accounts cannot be left as is just like retirement?
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: US Citizen - Pending PR - Married to Canadian - What to Do with Accounts?

Post by nelsona »

US brokers are not licensed to provide services to Cdn residents, thus would be in violation of provincial securities laws. The same applies to Cdn brokerages for those living in US. The regulatory bodies on both sides of the border allow only retirement accounts to be maintained.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
Post Reply