As a Dual US/CDN citizen I've always operated under the assumption that all TFSA's are "Trusts" as far as IRS was concerned -and not wanting to deal with 3520 reporting have avoided using one.
Now I read that if a TFSA is not a 'trust' then at least for US tax purposes it would be treated as a 'cash' brokerage account (I only own stocks, no ETF's or Mutual Funds) and no 3520 required.
Seeing this as a potential to save at least a little bit on taxes I would like to open a TFSA however how does one determine if it is setup as a Trust for US tax purposes?
How do I know if a TFSA is a "Trust"?
Moderator: Mark T Serbinski CA CPA
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MIKE2000Z28
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Re: How do I know if a TFSA is a "Trust"?
[quote="MaxPwr905"]As a Dual US/CDN citizen I've always operated under the assumption that all TFSA's are "Trusts" as far as IRS was concerned -and not wanting to deal with 3520 reporting have avoided using one.
Now I read that if a TFSA is not a 'trust' then at least for US tax purposes it would be treated as a 'cash' brokerage account (I only own stocks, no ETF's or Mutual Funds) and no 3520 required.
Seeing this as a potential to save at least a little bit on taxes I would like to open a TFSA however how does one determine if it is setup as a Trust for US tax purposes?[/quote]
I believe the irs was asked for an official position on this on how to report it but it has been crickets. I know people here use 3520 and on other cross border forums people haven't been using 3520 for years with no ill effect. I just don't see how they can come down on you for something they won't address. I really don't think it is all that important as long as your reporting it in some way through fbar or posibly form 8938. Your dealing with an organization that is so big and with no consensus on many issues.
Now I read that if a TFSA is not a 'trust' then at least for US tax purposes it would be treated as a 'cash' brokerage account (I only own stocks, no ETF's or Mutual Funds) and no 3520 required.
Seeing this as a potential to save at least a little bit on taxes I would like to open a TFSA however how does one determine if it is setup as a Trust for US tax purposes?[/quote]
I believe the irs was asked for an official position on this on how to report it but it has been crickets. I know people here use 3520 and on other cross border forums people haven't been using 3520 for years with no ill effect. I just don't see how they can come down on you for something they won't address. I really don't think it is all that important as long as your reporting it in some way through fbar or posibly form 8938. Your dealing with an organization that is so big and with no consensus on many issues.