Canada/US Tax Questions

ethomps · Post by **ethomps** » Sat Mar 14, 2015 3:01 pm

Hi there,

I was referred here from the VisaJourney forums-- looking forward to being a part of your community!

Here's my situation:

Arrived to the US from Canada in February 2014 on a K1 Visa, got married and filed for Permanent Residency which is still pending. I had no Canadian income for the year 2014, but made $300 in interest from my Canadian Tax-Free Savings account. My wife and I had to dig into my savings quite often over the course of the year, and I have less than $3000 left in my Canadian bank account.

I've heard the term "exit taxes" for Canada, but I'm not sure if this is something I need to be doing yet? As my permanent residency application is still pending, and you never know what the outcome will be! Don't want to shoot myself in the foot. Though I'm not sure if I should be filing a normal return in Canada as I normally do each year, or if a different procedure is now required of me since I have substantial presence in the U.S..

A little bit lost!

nelsona · Post by **nelsona** » Sat Mar 14, 2015 6:28 pm

You left canad in feb 2014, so you MUST file a a departure return.

For US you should file joint full year 1040 reporting all income.

nelsona · Post by **nelsona** » Sat Mar 14, 2015 6:29 pm

Its not a question of your green card its a question of living in US and not Canada. GC doesn't really matter.

ethomps · Post by **ethomps** » Sun Mar 15, 2015 2:24 pm

[quote="nelsona"]You left canad in feb 2014, so you MUST file a a departure return. For US you should file joint full year 1040 reporting all income.

Its not a question of your green card its a question of living in US and not Canada. GC doesn't really matter.
[/quote]

Thank you for taking the time to respond! I was reading up on the CRA website and want to make sure I'm understanding clearly.

Am I correct in saying TFSA are exempt from deemed disposition?

What about money left in a regular checking account, is this subject to taxation upon departure from Canada?

nelsona · Post by **nelsona** » Sun Mar 15, 2015 6:21 pm

Yes, TFSA is not subject to ANY Cdn tax, let alone deemed disposition. But it is subject to US tax and special reporting, so you should collapdse immediately. You now have specia lforms to fill for 20014 and now 2015, so get this closed before end of 2015.

Cash os never subject to demed didpostion. Only things which have capital gains associated.

ethomps · Post by **ethomps** » Mon Mar 16, 2015 11:33 am

[quote="nelsona"]Yes, TFSA is not subject to ANY Cdn tax, let alone deemed disposition. But it is subject to US tax and special reporting, so you should collapdse immediately. You now have specia lforms to fill for 20014 and now 2015, so get this closed before end of 2015.

Cash os never subject to demed didpostion. Only things which have capital gains associated.[/quote]

Perfect, thank you for your help!

ethomps · Post by **ethomps** » Wed Mar 18, 2015 5:25 pm

Hey Nelsona,

Would you mind telling me the name of the special TFSA form that I need to file with my US taxes?

Also, since I didn't have any Canadian income for 2014, do you think my Canadian Exit Return could be easily handled by someone like H&R Block? I've used them for the past 7 years back home in Canada since I never had anything too complicated.

Regards