TFSAs - A Case for US citizens resident in Canada owning?
Moderator: Mark T Serbinski CA CPA
TFSAs - A Case for US citizens resident in Canada owning?
Noticed US citizens resident in Canada are abandoning TFSAs because they are taxable in US. I can see people doing so to avoid the 3520 reporting but might there be a case for continuing once one has mastered the reporting. For example, although taxable in the US might one have sufficient Cdn taxes on erall ovpassive income to eliminate or mitigate the US tax owing?
The foundation of your reasoning is sound...however my advice to anyone is to stay away from foreign trusts such as the TFSA as the reporting costs to hire an Accountant out way the benefit of the gains accrued.
I for one have not even entertained the thought of a TFSA just due to the reporting requirement. Form 8891 form my RRSP is sufficient enough thank you.
Hopefully, down the road, maybe they will include the TFSA into the treaty...or develop a simplified form like they did with the RRSP....until my advice is to stay away.
I for one have not even entertained the thought of a TFSA just due to the reporting requirement. Form 8891 form my RRSP is sufficient enough thank you.
Hopefully, down the road, maybe they will include the TFSA into the treaty...or develop a simplified form like they did with the RRSP....until my advice is to stay away.
I agree as well - but in the end, I chose to keep my TFSA and continue reporting on 3520/3520A. My only concern is I've heard from other folks on this forum that the 3520 often results in getting threatening letters from the IRS - many in error. I haven't received one of these yet, but I won't be surprised if I do.
I still think I'd advise any US citizen who doesn't already have a TFSA not to get one.
I still think I'd advise any US citizen who doesn't already have a TFSA not to get one.
TFSA
Thank you all. I too have kept my TFSA since I opened it before I knew better. I caught up my 3520s & 3520As. For the one that was past due (catchup) I did get one of the threatening letters but I responded and never heard more. I think I will keep mine open since I figure it is as easy as closing it down. ...what I was toying with was whether to make a contribution this year....but have decided no harm since I already have to file. If I didn't have one I too likely would not have opened one.
A few other folks on this forum received letters saying that a civil penalty has been proposed for not reporting a foreign trust in a timely manner.
Other letters had to do with errors filling out the form - some of these letters were sent in error.
The only "threatening" theme was the proposing of penalties, even a statement of account with a penalty owing.
Other letters had to do with errors filling out the form - some of these letters were sent in error.
The only "threatening" theme was the proposing of penalties, even a statement of account with a penalty owing.
MGeorge, I received my erroneous error letter about 8 weeks after I mailed in my 3520/3520A. The letter saying that penalties were being considered unless I could explain why my forms were late, arrived about another 8 weeks after that. The letter saying that no penalties would be assessed, arrived about a month after I sent in my explanation. I sent mine in at the end of January and it was all resolved by July. Sounds like you may be in the clear!