[color=darkblue]I am moving to US on immigrant visa. I did some research on this site as well as CRA and IRS websites. There are some conflicting or confusing rather, information that I think I need clarification. Believe me I have spent hours but I am still not 100% sure of everything.
I am planning to enter in US with Immigrant visa on Nov 25, 2012, I become Resident of US immidietly, although I will be moving in end of January after selling my house and move my belongings there. In the mean time I will be continuing on my current Canadian job, until I am transfered officially by my employer to the US head office.
This is so far I understood.
1. I will have to file taxes in Canada for 2012 as usual. Also in following year for part of 2013 I work here and live here (probably January or Feb the most).
2. I will have to file US tax with $0 income for 2012 and Foreign income exclusion declaring my Canadian income. Also will have to file US tax following year for 2013 for whatever I earned there.
What I am not sure about is............
3. I don't automatically become a non-resident after aquiring Green Card, as long as my residence and spouse/kids are in Canada. Unless I severe all my ties as per CRA site.
4. I can sell my house in Canada as primary residence without having to pay Capital Gain upto a year when I leave Canada to settle down in US. Or should I sell house even before getting Green Card?
5. How declaring non-resident vs resident will affect my taxes on US earning. Do I get excemption on US income under treaty in each case? Or do I pay dual taxes?
6. What about my stock options from my current company (Canadian branch of US based company)? Should I cash them before leaving or it depends on company? The options are handled by US based firm in USD and I used to get paid in USD in my USD account in Canada.
7. My RRSP/DRSP and CPP remain intact as long as I don't cash them.
How much does it cost to hire accounted to file taxes for first two years? I hope I don't get warning for asking this general question. But I just need a general idea on what range these cross border tax firms charge.
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Moving to US - house sale, Stock Options and RRSP
Moderator: Mark T Serbinski CA CPA
1. Correct.
2. Incorrect. You will have to report all income you earne after Nov 25 on a dual status 1040.
3. correct
4. You have a year for Cdn tax purposes, and three years for US purposes for a tax free sale.
5. You report all income in both countries, and take credit for taxes paid in one country on the other.
6. discussed elsewhare
7. yes, but you have special reporting required for your RRSP in US.
8. about $3000
2. Incorrect. You will have to report all income you earne after Nov 25 on a dual status 1040.
3. correct
4. You have a year for Cdn tax purposes, and three years for US purposes for a tax free sale.
5. You report all income in both countries, and take credit for taxes paid in one country on the other.
6. discussed elsewhare
7. yes, but you have special reporting required for your RRSP in US.
8. about $3000
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
Thanks Nelsona.
As for No. 3, I just read on CRA site the following and looks like I will be considered Deemed Non-Resident. Tell me if this is not conflicting with what I earlier wrote.
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Deemed residents
You are a deemed resident for tax purposes for the entire tax year if you:
stay in Canada for 183 days or more in that tax year;
do not have significant residential ties with Canada; and
are not considered a resident of another country under the terms of a tax treaty that Canada has with another country.
If this is your situation, see Deemed residents for the rules that apply to you.
Deemed non-residents
If you are a factual resident of Canada and a resident of another country with which Canada has a tax treaty, you may be considered a deemed non-resident of Canada for tax purposes.
You become a deemed non-resident of Canada when your ties with the other country become such that, under the tax treaty with which Canada has with the other country, you would be considered a resident of that other country.
As a deemed non-resident, the same rules apply to you as a non-resident of Canada.
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Do you have a link to official site where it says that I have a year to sell house and that I won't have to pay 25% that non-residents pay. I won't be renting my residence, but will have my family stay there until its sold.
As for No. 3, I just read on CRA site the following and looks like I will be considered Deemed Non-Resident. Tell me if this is not conflicting with what I earlier wrote.
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Deemed residents
You are a deemed resident for tax purposes for the entire tax year if you:
stay in Canada for 183 days or more in that tax year;
do not have significant residential ties with Canada; and
are not considered a resident of another country under the terms of a tax treaty that Canada has with another country.
If this is your situation, see Deemed residents for the rules that apply to you.
Deemed non-residents
If you are a factual resident of Canada and a resident of another country with which Canada has a tax treaty, you may be considered a deemed non-resident of Canada for tax purposes.
You become a deemed non-resident of Canada when your ties with the other country become such that, under the tax treaty with which Canada has with the other country, you would be considered a resident of that other country.
As a deemed non-resident, the same rules apply to you as a non-resident of Canada.
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Do you have a link to official site where it says that I have a year to sell house and that I won't have to pay 25% that non-residents pay. I won't be renting my residence, but will have my family stay there until its sold.
Unless you move to US in Noveember, and do not return to Canada for the next few maonths, then, yes, technically, you could be considered DNR from November. However, if you return weekends, have no fixed address in US, you will not be considered deemed non-resident, becuae you do not meet the treaty definition of resident of US (having GC is not enough).
Once you sell your place in Canada, and everyone moves, you will simply be non-resident, pure and simple. The date taht happens will be your departure date.
Question. Atre you getting a GC in November? most transferees enter on L visa and then get GC months/years later. L visa does not trigger US tax residency, unless you live and work in US, and do not live in Canada.
Once you sell your place in Canada, and everyone moves, you will simply be non-resident, pure and simple. The date taht happens will be your departure date.
Question. Atre you getting a GC in November? most transferees enter on L visa and then get GC months/years later. L visa does not trigger US tax residency, unless you live and work in US, and do not live in Canada.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
I do have an address of my in-laws in US. Will that make me PR of US under treaty or it will be as you said the actual departure with my family. Should I postpond my entry till January to deal with taxation thorn in one tax year. In the same year when I accept the job in US, get GC and officially move? Or it doesnt matter.
No I have got IR-1 through spouse. My company is US based and I am hoping to get a transfer within company.
BTW, I was reading The Border Guide today and in there they mention to cash in all the RRSP before becoming US PR and pay 25% tax on the proceedings. I can claim most of it as foreign tax credit with IRS. Is that true ?
No I have got IR-1 through spouse. My company is US based and I am hoping to get a transfer within company.
BTW, I was reading The Border Guide today and in there they mention to cash in all the RRSP before becoming US PR and pay 25% tax on the proceedings. I can claim most of it as foreign tax credit with IRS. Is that true ?
Whoa! You aree misreading Border guide.
IF you would cash in RRSP, it would be AFTER becoming Cdn non-resident, not before. Otherwise your RRSP income is merely addes to your Cdn income like lnormal and would be taxed MUCH more than 25%.
And don't confuse having GC with US tax residency. While as a GC-holder you are now forver taxable in US, you are not a tax resident of US (and thereby a Cdn non-resident for tax purposes) unless and until you move to US, and sufficient;y make ties there tp overcome your Cdn ties.
If you are not intending to move and work there right now, I would not be spoofing an address in US yet. You will still need to report your Cdn income after the day you get your GC, regardless, but why expose your self to state tax, and have the burden of maintaining Us address, if you are not yet ready to live there?
As and GC recipient, you do need to move there at some point soon (which was presumabaly why you got GC), but do it when you are all ready
IF you would cash in RRSP, it would be AFTER becoming Cdn non-resident, not before. Otherwise your RRSP income is merely addes to your Cdn income like lnormal and would be taxed MUCH more than 25%.
And don't confuse having GC with US tax residency. While as a GC-holder you are now forver taxable in US, you are not a tax resident of US (and thereby a Cdn non-resident for tax purposes) unless and until you move to US, and sufficient;y make ties there tp overcome your Cdn ties.
If you are not intending to move and work there right now, I would not be spoofing an address in US yet. You will still need to report your Cdn income after the day you get your GC, regardless, but why expose your self to state tax, and have the burden of maintaining Us address, if you are not yet ready to live there?
As and GC recipient, you do need to move there at some point soon (which was presumabaly why you got GC), but do it when you are all ready
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Oh, I got it about the RRSP.
The only reason I would like to activate my GC (call it entry, getting stamped or POEing) month before I actually move is that I have to get SSN or I551 stamp for the US employer to accept a position. Another reason is that in the middle of winter I have to put my house on sale and wrap up things and make arrangements on the destination. Thats all will take few weeks to a month or so. I don't want to stay in Canada until house closing though, but atleast get the deal done before moving stuff (you know how showings go for the house sale etc).
So that is why I just want to buy a month or 6 weeks time to get everything straightened between entry and actual move.
The only reason I would like to activate my GC (call it entry, getting stamped or POEing) month before I actually move is that I have to get SSN or I551 stamp for the US employer to accept a position. Another reason is that in the middle of winter I have to put my house on sale and wrap up things and make arrangements on the destination. Thats all will take few weeks to a month or so. I don't want to stay in Canada until house closing though, but atleast get the deal done before moving stuff (you know how showings go for the house sale etc).
So that is why I just want to buy a month or 6 weeks time to get everything straightened between entry and actual move.
The 3 years for IRS comes from the requirement that you live 2 of last 5 years in home for sale to benefit from the 250K exemption.
The 1 year for CRA comes from the calculation of cap gains on a change of use of former principal residence.
You can look up the information on IRS and CRA website if you wish.
The 1 year for CRA comes from the calculation of cap gains on a change of use of former principal residence.
You can look up the information on IRS and CRA website if you wish.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
In the other thread that just opneed by tax1000, are you not confirming that he would be come deemed non-resident on his departure date. Or is departure date is not equal to when one enters in US to obtain Green Card. In my case my family and myself will be in Canada for some time. Or should I try to get closing date on house before I start my job in US ?