New Tax agreement signed today?

This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.

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MIKE2000Z28
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Joined: Wed Jan 16, 2008 11:49 am
Location: Quebec, Canada

New Tax agreement signed today?

Post by MIKE2000Z28 »

Do the exemptions mean anything to us who are Americans living in Canada. Does it mean we can have a TFSA and RESP?
nelsona
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Post by nelsona »

It changes nothing for the taxpayer. it merely lets the Cdn banks deal with CRA instead of IRS directly.

No effect on foreign account reporting or taxation.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
exPenn
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Post by exPenn »

It just means that if you have not been reporting your TFSA or RESP, your Canadian bank will not rat you out to the IRS under FATCA.
Pablo
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Location: USA

Post by Pablo »

"Prior to the agreement, IRS did not recognize registered disability savings plans, registered education savings plans, or tax-free savings accounts, and treated them as “off-shore trustsâ€￾ — and taxed them accordingly.

The new agreement states Canadian registered accounts "shall not be treated as U.S. Reportable Accounts under the Agreement," but it's not clear if that exempts Canadian citizens who have U.S. ties from reporting them as well."

http://www.cbc.ca/news/politics/fatca-t ... -1.2524444
nelsona
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Post by nelsona »

The agreement only deals with the reporting aspect, not taxation.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
nanic
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Joined: Mon Nov 21, 2011 2:26 pm

FATCA and FBAR

Post by nanic »

Does this mean the FBAR will be replaced by FATCA and we don't need to fill out the FBAR forms anymore?
nelsona
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Post by nelsona »

http://www.fin.gc.ca/afc/faq/fatca-eng.asp

"The IGA [which is the Intergovernmental agreement] is strictly an information sharing agreement and does not involve the imposition by the U.S. of any new or higher taxes."

No changes to the IRS taxation regime.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
nelsona
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Post by nelsona »

To give an analogy:

The IRS dfoes not require US banks to issue a 1099 for interest below a certain threshold ($10). That does not mean that the accountholder does not have to report the interest on his 1040.

btw, the full test of agrreement is here:

http://www.treasury.gov/resource-center ... 5-2014.pdf

it says nothing about taxation, only reporting by the financial institution.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
nanic
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Joined: Mon Nov 21, 2011 2:26 pm

Post by nanic »

I meant FinCEN report
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