Canadian NON RESIDENT moving to US

[Alberto Beroni]

I am moving to US on an L1-A, however I was on assignment in UAE for past several years so was non resident in Canada.
I have assets in Canada and UAE in the form of Cash and RRSPs. I want to be able to move these to US and purchase a property. Question:
1. Can I transfer my cash to US without incurring US tax?
2. Can I leave my RRSP in Canada without incurring US tax?

Thank you

[tsanaha]

you can keep RRSP in Canada but make sure you file f8891 and make tax deferral election the year you move in to USA. Also make sure you file FBAR.

You can transfer all your assets into USA -- I do not think you should pay US tax on assests that you already have (before becoming a US taxpayer).

[nelsona]

US has INCOME TAX, not possession tax.

Now. regardless of where the money is, you need to pay US tax on any income it produces, if you live in US.

As Tsanaha sez, you will have special reporting requirements for your non-US holdings inclusing RRSP. You cannot transfer your RRSP out of canada, un;less you simply want to kill the RRSP and pay the 25% Cdn tax.

[danny]

Strange that someone moving on L1 has to still comply with the new tax regulations of US. I thought US person applied to citizens and resident aliens but not to non resident aliens.

[nelsona]

All rules that apply to citiens apply to resident aliens -- ie those living in US and not elsewhere.

[danny]

thanks.

[danny]

although for immigration purposes a TN/H1B is a non resident alien but I see your point ie for tax purposes one is a resident alien

[nelsona]

These ARE tax issues.

And to be accurate, TN/H1 are temrs non-IMMIGRANT statuses.

[danny]

indeed they are tax issues.

non-immigrant is the word then for the 'statuses'

[madhoa]

Once you meet the 'substantial presence' test, then you are a US person irrespective of immigration status (with some exceptions for foreign students in their first 5 years, diplomats etc.)

[danny]

indeed so i learnt. Rather annoying for people on temporary work permits. I have not kept up but this regulation seems to be a rather new one. It was not around in 2004.

thanks nelsona and madhoa

[nelsona]

Um, danny, just be cause you dis not know about the regs, does not mean they did not exist.

TN/H1's living in US have ALWAYS been subject to FBAR, and RRSP reporting, just as they have filed a 1040.

Needing to file a 1040 is the linch-pin for ALL the other IRS, Treasury requirements .

It is obvious that IRS did a poor job of informing foreign residents of this, but the requirements were readily available to 1040-filers, which would no doubt have included you in 2004, if you were working in US.
IRS Pub 519 has existed for probaly 25 years.
RRSP were first addressed in 1985
The regs have existed since long, long ago.

[danny]

ya probably did exist then but never heard about it. RRSP reporting I knew about but not this foreign bank reg.