Dual citizen, living in canada. Trying to determine what to file for TFSA in 2014 (and any retroactive filings needed).
Q1 - TFSA 1) opened in 2009, just a simple locked in $5000 GIC, expired in early 2014.
This is just a GIC, the account did not have ability for mutual funds, the account appears more like a deposit account than a trust. I have filed FBAR and 8938 in past years.
Can i simply declare this as interest on schedule B for 2014, without any 3520 at all? Do i need to do 8938?
Q2 - TFSA 2) opened in 2010, contains a few mutual funds. Mutual fund transferred out to non-registered account late 2014 leaving the TFSA account with no assets.
For this i have been working on 3520/3520-A for 5 years. I expect i will then need to file these along with changes to 1040+schedules for 2010-2013. And then the final set with 2014.
Q3) Given that i have filed 8938, do i simply file these updates, i presume no need to look into any voluntary disclosure programs?
Does this sound like i have it right or have i missed something?
GIC in TFSA
Moderator: Mark T Serbinski CA CPA
Still would be interested in any thoughts on the questions above.
Q4) for 2014, at the moment i am showing the realized gains in the closing year of TFSA 2 (2014) on scheduled D. And showing the interest for TFSA1 on schedule B. This causes me to owe US tax, which i have not normally faced. I suspect to fix this i may have to file a pile of 1116 for passive income over up to 10 years, hoping i can carry forward some help from there. I have not bothered to file the 1116 for many years as my income was low enough i did not need it. Any better ideas than this mountain of papers?
Q4) for 2014, at the moment i am showing the realized gains in the closing year of TFSA 2 (2014) on scheduled D. And showing the interest for TFSA1 on schedule B. This causes me to owe US tax, which i have not normally faced. I suspect to fix this i may have to file a pile of 1116 for passive income over up to 10 years, hoping i can carry forward some help from there. I have not bothered to file the 1116 for many years as my income was low enough i did not need it. Any better ideas than this mountain of papers?
We already have a TFSA thread. Nothing in your thread appears new.
Rememewbr that for US purposes you can report GIC income year-by-year, just like in canada, you do not have to report theentire 5-yr interest (not gain). Besides, if the c$ dropped between time you bought and "sold" GIC, you will have a capital loss.
Rememewbr that for US purposes you can report GIC income year-by-year, just like in canada, you do not have to report theentire 5-yr interest (not gain). Besides, if the c$ dropped between time you bought and "sold" GIC, you will have a capital loss.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
Thank you, good points, i had missed the other thread before. For reference the other thread, which relates is:
http://forums.serbinski.com/viewtopic.p ... t=gic+tfsa
As far as the currency, i still have a net gain in the interest over the full term. CDN$ was similar price in jan 2009 to recent.
What is interesting is if i report interest at year end based on year end exchange rates and bank statement of accrued interest, there is interest gain in each period except the last one. The GIS was cashed on Jan 14, 2014, so shortly after year end. Currency fluctuation results in effectively a negative interest of about $148 vs the end of 2013.
So overall it is not a capital loss when cashed. Can i report a negative interest on schedule B for 2014? Perhaps it would cancel other positive interest items? Or is there something else funky needed in this case?
http://forums.serbinski.com/viewtopic.p ... t=gic+tfsa
As far as the currency, i still have a net gain in the interest over the full term. CDN$ was similar price in jan 2009 to recent.
What is interesting is if i report interest at year end based on year end exchange rates and bank statement of accrued interest, there is interest gain in each period except the last one. The GIS was cashed on Jan 14, 2014, so shortly after year end. Currency fluctuation results in effectively a negative interest of about $148 vs the end of 2013.
So overall it is not a capital loss when cashed. Can i report a negative interest on schedule B for 2014? Perhaps it would cancel other positive interest items? Or is there something else funky needed in this case?
Please us the correct terms. Your only "capital loss or gain" is from the buying and selling of your GIC. The INTEREST is the income you got every year, they are separate. You will report interest in one place and cap gain/loss in another.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
Ok i had them mixed up and was not thinking of GIC maturing as a sale.
When i purchased CDN was about .80 (jan 2009). When i sold .91(jan 2014).
So if i did the calculations right:
In canada would be $1300 interest for CDN tax, however it is TFSA so no tax.
But taxed in US as follows:
US $1260 interest (total reported over 5 years, US-CDN close to par at each year end)
US $460 capital gains due to the currency change
I'll have to go over the US returns for all those years and see how it effects the bottom line.
So alternatives, is there an alternate way to report this that is more fair...
It was a non-redeemable GIC and my bank statements do not show it as interest added. They simply show the investment value, and a change in value. This is only realized at the end as $1300 interest.
When i purchased CDN was about .80 (jan 2009). When i sold .91(jan 2014).
So if i did the calculations right:
In canada would be $1300 interest for CDN tax, however it is TFSA so no tax.
But taxed in US as follows:
US $1260 interest (total reported over 5 years, US-CDN close to par at each year end)
US $460 capital gains due to the currency change
I'll have to go over the US returns for all those years and see how it effects the bottom line.
So alternatives, is there an alternate way to report this that is more fair...
It was a non-redeemable GIC and my bank statements do not show it as interest added. They simply show the investment value, and a change in value. This is only realized at the end as $1300 interest.
As I implied earlier, fo US purposes, you can report interst in 2 ways: year-by-year, as isaid ,or by the cash method, in the year you got it.
As youve figured out the Cdn interst is meaningless, all thta matter is the USD interest that you recieved (which you can report this year), and the USD gain/loss that you incurred (which you must report this year).
As youve figured out the Cdn interst is meaningless, all thta matter is the USD interest that you recieved (which you can report this year), and the USD gain/loss that you incurred (which you must report this year).
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best