moving from USA to Canada - retirement investment

[Rajaijah]

Hi all,

I immigrated to Canada this year from USA. I have about 10K in my 403b and about 4K in IRA and 12K in roth. I am confused about the best way of handling this investments.

Little about my tax status in usa: I have been working in the USA for 9 years (7 years as student + 2 years employment). I am not a green card holder. I worked till May 2010 and quit my job and relocated to Canada. I will be filing 2010 return.

[b]Regarding retirement investments
[/b]
I know I can withdraw 10K for first home purchase from IRA without penalty. Can I do it after 2 years or has to be done while I was in USA. I am looking at buying my first home which will be in canada in the next 2 years.

If I can withdraw , say in 2012. do i have to file tax in USA. If I do, will the distribution come under the 30% flat tax or will get normal treatment (meaning personal exemption and standard deduction)

[b]Regarding non retirement investments
[/b]

I have investment portfolio with fidelity and scottrade. Can i keep trading while I am not in USA. If I can, what are the tax implications. do i just file Canada tax and declare foreign income or do i have to pay US tax as well.

I am eventually planning to move all my investments to a Canadian discount broker. But I need to know if its a must for me to transfer now or can I do it next year.

Thank you all for the great help in this forum

[nelsona]

The first home purchase can be anywhere, not just if youy live in US. However, you are simply avoiding the penalty. The withdrawal is fully taxable in US and Canada. It will be flat tax in US and included as income on your Cdn return, with US tax as a credit.

You are no longer allowed to trade in your US investment account. You should be moving your investments to a Cdn broker. In any case your gains are only taxable in canada, and only the gains/losses fromn the time you entered canada are reportable.

[Rajaijah]

thank you very much.

I did not know about trading in USA account while in canada.

I will be filing 1040 this year since i was there in USA until May and got paid until May.

I have done some investing after I established residency in canada. How does that count. Just report income in Canada and not in USA?

or

should I just do 1040NR and declare my income until may and the investment income after May in Canada or report in USA and Canada and request credit in Canada for USA tax for that portion of investment income.

I am working on moving all my money to Canada very soon to avoid further complications.

The move is lot more than complicated but still better than if I had been a USC or Green card holder.

Thanks again.

[nelsona]

You need to move your brokerage to canada.

How you report in US will depend if you file 1040 or 1040NR for the period after you left US 2010. If you file 1040NR, then you won't report any gains/losses on it.

[Rajaijah]

thanks nelsona. very much appreciate your help.