US citizen moving to Montreal

[jl77]

Hi,
I recently discovered this forum and want to thank all the people providing their very helpful advice. I'd like to ask for comments regarding my situation below. I apologize in advance since I'm sure previous posts on this forum have already answered my questions but I haven't gone through everything yet.

I am a US citizen (in fact, dual French/US citizen, but only the US part is a pain for tax purposes :-( ), and moving in a couple of weeks from Philadelphia to Montreal. My immigration status will be temporary worker (for 3 years; longer term I plan to apply for permanent residency in Canada).

I'd like to minimize my US and Canadian tax filing headaches next year and I guess I've discovered late that moving from the US to Canada is harder than one would think. Fortunately my assests are very liquid. Together with my spouse, we just have:
- 2 roth IRAs, 1 traditional IRA
- 2 non-retirement brokerage accounts
All the accounts are with Fidelity, where I was told that I could keep all accounts open and continue trading from Canada. However, that doesn't seem to check out with what people are saying here.
So is the following true:
1) I can keep the retirement accounts with the US broker and continue trading in them. I do trade stuff like options in these accounts, but I don't think it matters. I won't pay Canadian taxes on those as long as I don't make additional contributions while in Canada.
2) I should close my positions and stop trading in the non-retirement US accounts when moving to Canada. I should transfer my assets to a Canadian broker trading US equities.
3) Types of accounts to avoid once in Canada as a US citizen: RRSPs are ok, not TFSA and RESP due to heavy IRS filing requirements. Is there any easy way to get accounts with tax benefits similar to TFSAs and RESPs? For example, would I be allowed to open an U.S. 529 plan for my kids from Canada?
4) Types of investments to avoid once in Canada: I should not buy Canadian-domiciled ETFs or mutual funds.
Any other advice on common mistakes to avoid is welcome... Thanks in advance for your help!

[nelsona]

1) Just to correct, you will not pay any tax on IRA until you withdraw them in canada, you may continue to fund as you wish without consequence. It is ROTHs that you must not contribute to, and must furmish a statement with each Cdn return.
2) you will have to sell mutual funds. For other investemnts All Cdn brokers deal in US equities, so you do not need to specify a broker that deals in US equities. You need only transfer these.
3. Don't bother with these. 529s are not sheltered in canada.

[eortlund]

I could not figure out how to save for my kids' college due to the US-Canada tax issues. What I did, and what may be an option for you, is I had my brother open up 529s for my kids, funded with our $.

[nelsona]

That is a good way to go if you insist on 529. I just think a normal tax-managed account, or real estate is so much simpler.

[JGCA]

Your brother may do this within certain limits such as gift tax rules and the state in which he lives all have some different rules on these 529 plans.

As Nelsona said a regular investment may be the simplest way, I would only consider real estate as a final option given the nature of the investment the reporting requirements and of course your risk tolerance.

[nelsona]

Definitely. I was more refering to investing in one's own principal residence which is tax-free. $3000/yr can buy you quite a lot more house, and potentilly bigger tax-free cap gain down the road.

[JGCA]

Your right, real estate is still cheap in Montreal compared to say Toronto or Boston so in that respect you have a point.

[jalways747]

according to them, they say due to recent legislation changes
you cannot hold non retirement brokerage account anymore.!!
did anyone else get this info ?