Closed TFSA accounts before arriving in the US - Report?

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dazealex2
Posts: 29
Joined: Thu Mar 05, 2015 11:07 pm

Closed TFSA accounts before arriving in the US - Report?

Post by dazealex2 »

Hello all,

To avoid the burden of filing, I closed all TFSAs prior to coming to the US for work on a TN. But they were open in the calendar year, for a few weeks in January.

Thoughts?

daze
nelsona
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Post by nelsona »

It will depend on whether you file full year 1040, you would need to report. OR of you file dual/status 1040/1040NR, where you would not.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
dazealex2
Posts: 29
Joined: Thu Mar 05, 2015 11:07 pm

Post by dazealex2 »

I'd be filing a dual return, Canada (exit) and US (remaining period when we become NRs of Canada). Can you confirm, please?
nelsona
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Post by nelsona »

It would be mistake to file dual in US, since you will be HEAVILY taxed compared to filing full year (especially if married). You will just have to suck up the reporting, or pay huge tax bill for nothing.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
dazealex2
Posts: 29
Joined: Thu Mar 05, 2015 11:07 pm

Post by dazealex2 »

nelsona, I'm not sure what you mean by filing dual. Doesn't one have no option when you've severed ties with Canada? The tax firm doing my taxes told me that the year we become non-residents in Canada through the sale of the home, and my family joining me in the US, then that would be the official date from the Canadian perspective when we became non-residents. So that part's clear to me. But, then there is the US substantial test for residency for tax purposes which is based on a forumla. He told me that once we're all NRs (the family), we'd able to save on taxes because of more deductions available in the US.

So part of the Canadian final taxes, I'm not sure who I would be paying taxes to, either dual or just US? Is this what you were alluding to?
nelsona
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Location: Nowhere, man

Post by nelsona »

Cdns ALWAYS have the option of filing a full year 1040. Filing dual-status (ie. non-resident of US for 1st part of year, resident of US last part of year) has many restrictions -- including the inability to file a joint tax return with spouse, which are not there when you choose to file full year 1040 joint filing.

If you arrived late in year and don't meet SPT, then simply file 1040NR. If you did meet SPT, then file full year, just like a US citizen would if moving from canada to US, and take all the credits, deductions and exemptions that they would.

Sounds like the firm you are dealing with is not up to speed on what Cdns are specifcially allowed to do by treaty.


This has no bearing on your Cdn residency nor on how you file in canada.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
dazealex2
Posts: 29
Joined: Thu Mar 05, 2015 11:07 pm

Post by dazealex2 »

Working with Deloitte actually. They're filing for the full year. But haven't told me anything about reporting the the TFSAs (though they were open for only a short white in January) before I moved to the US.

They've extended the deadline for the US taxes to October 15th. Sounds scary from what I read about 3250/A, the former of which has to be filed by March 15 (long gone).

In fact, does one always need to file both 3250 and 3250A? In my case, the TFSAs were all closed in January prior to coming to the US.

I'm freaking out now because of the fines associated here...

Help!
lamehuw
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Joined: Thu Nov 19, 2020 3:08 am

Re: Closed TFSA accounts before arriving in the US - Report?

Post by lamehuw »

Being a Canadian citizen the government of Canada should provide the facility of TFSA in the US. We can facilitate ourselves in another country on https://www.bestdissertations.com/ so it should not need to close by the government of Canada.
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