"US Tax Crackdown" and Liquidating Canadian Assets

KStar · Post by **KStar** » Tue Oct 16, 2012 9:57 pm

Hi!

After reading this article:
http://m.theglobeandmail.com/globe-inve ... ice=mobile
I am wondering whether I should just liquidate all of my Canadian assets including RRSPs and bank accounts since the US government seems so intent on compliance?

I wish I had found your forum before I moved to the US and married my husband. After reading various posts, I have learned that I should have liquidated all of my investment accounts or transferred them to TD Waterhouse before I left. I will not be able to go back to Canada until November but I plan on trying to do what I can to close my accounts and what not then... I am wondering if you would advise moving and consolidating all RRSPs into a TD Waterhouse account at this point even though I moved here last Feb and got my green card in June? Or whether I should just really liquidate all of my assets and move them to the US?

Is the exit tax return very complicated? I only had mutual funds and GICs, one bank account and 2 remaining credit cards. I'm wondering how much you would charge for that type of return.

Thank you so much!

nelsona · Post by **nelsona** » Wed Oct 17, 2012 9:15 am

Not sure what you mean. US residents are not allowed to trade in Cdn brokerage accounts, and that has alaways been the case and has nothing to do with IRS or US govt.

Your RRSPs are fine in canada, and can be left there, all you ned to do is report them on a simple form, which has been around for years.

The crackdown is for US citizens living in canada, who neglected therir resposnsibility to report and file with IRS every year. You as a resident are filing, you just need to file correctly.

The departure return is pretty simple, all you need to do is determine the value of your holding (non-RRSP) on the day you left, and pay tax 'as if' you sold them on that day.

KStar · Post by **KStar** » Wed Oct 17, 2012 12:55 pm

Thank you so much for your prompt reply.

I guess I'm wondering whether it is possible to have my RRSPs that are currently held by MD Management (mutual funds) and ING (GICs) into TD Waterhouse now that I'm non-resident.

I didn't realise that brokers would not be able to work with me after I got my green card. I had hoped to sort all of that out after I actually had the green card in hand...then it would make sense to transfer assets knowing that I had been approved for US PR status.

nelsona · Post by **nelsona** » Wed Oct 17, 2012 2:06 pm

Yes it is possible and, when you inform MD and ING that you are in US, they will likely insist that you move your account. TD accepts new clients and can even do this by mail from US.

It's not your GC that is the issue. It is the fact that you live in a US state. The actual status is not important.

nelsona · Post by **nelsona** » Wed Oct 17, 2012 2:12 pm

There is no chance that your GC will be denied unless you were a convicted crack dealer in canada or something like that. In which case they would not have let you in anyways.

KStar · Post by **KStar** » Wed Oct 17, 2012 5:27 pm

Will my tax reporting from the US side be more complicated if I keep my Canadian RRSPs? You mentioned that the exit return is straightforward...which is a relief... I'm wondering if on-going tax reporting will be so bothersome that it might warrant liquidating all assets in Canada...

Also, are you aware of any Canadian banks that allow non-residents to have a chequing account?

Thanks so much!

nelsona · Post by **nelsona** » Wed Oct 17, 2012 9:54 pm

All Cdn banks allow you to keep a Cdn bank account when you move. You should have just kept your existing one.

It is 2 forms that you submit yeaely. If you are not coming back, you might as well sell RRSP at 25% Cdn tax and be done with it.

USCANIT · Post by **USCANIT** » Wed Oct 17, 2012 11:00 pm

Check with RBC Bank they have a bank in US and Canada and the transfer is easy. I would hope they could open a RRSP account for you similar to an IRA in the states so you could manage it that way. Everything is online now... You can even deposit a check with your iPhone!!!

nelsona · Post by **nelsona** » Thu Oct 18, 2012 1:14 pm

They can open a bank account, but not an RRSP. First, the RRSP must be a self0directed brokerage account, not a mutual funda ccount, and second RBC dominion securites (or whatever it is clled now) made the decision long ago to not do US resident RRSPs.