I need some advice on when to close my TFSA. I am a U.S. citizen first, then came to Canada 15 yrs ago and now I am also a Canadian citizen. I had the unfortunate opportunity to open a TFSA which at the time seemed like a wonderful idea until I found out about having to file the 3520-3520 A forms.
Needless to say, I am still getting letters from the IRS on this matter. That is not my concern right now as I believe it is being handled correctly and it is only a matter to time till it resolves itself.
My question is when is the best time to close it out. I put it into a TFSA stock purchasing acct. and at the present time it is at a loss right now. Is it still best to close out the acct and get out of the nightmare of the 3520's or is it worth staying in for another year? Are there advantages/disadvantages of waiting for it to rise next year as expected or is it worse? I need to make the decision soon as this year is almost over. Any help/advice would be appreciated. :)
When to close your TFSA
Moderator: Mark T Serbinski CA CPA
Well, it is unfortunate from a Cdn tax point of view that your investment has lost money, since you cannot claim this on your Cdn return.
And keeping beyond Dec 31, will result in another round of 3520 filings at year-end, as well as PFIC considerations (you are looking at PFIC matters on this account, eh?)
The losses are usable - -for what taht is worth -- on your US return, just as the gains must be reported(which is the third reason for USC's not to have TFSA's)
Personally, I'd be cutting my losses now, before year-end. You can always put back those funds, plus any futire contribution room, if this ever sorts itself out for US purposes.
And keeping beyond Dec 31, will result in another round of 3520 filings at year-end, as well as PFIC considerations (you are looking at PFIC matters on this account, eh?)
The losses are usable - -for what taht is worth -- on your US return, just as the gains must be reported(which is the third reason for USC's not to have TFSA's)
Personally, I'd be cutting my losses now, before year-end. You can always put back those funds, plus any futire contribution room, if this ever sorts itself out for US purposes.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
Yikes. Basically mutual funds in your TFSA aaaccount, just like in any other account except RRSPs, are subject to PFIC reporting and taxation.
My guess is that you haven't handled this properly since you've never heard of it.
Look around this forum for PFIC and form 8621. It is a worse headache than 3520.
You also have the FACTA issues (form 8938) and of course FBAR.
My guess is that you haven't handled this properly since you've never heard of it.
Look around this forum for PFIC and form 8621. It is a worse headache than 3520.
You also have the FACTA issues (form 8938) and of course FBAR.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best