RiF/IRA

This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.

Moderator: Mark T Serbinski CA CPA

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dimancea
Posts: 26
Joined: Thu Oct 28, 2004 6:35 pm

RiF/IRA

Post by dimancea »

I am a dual citizen, residing in the US. Is it possible to transfer a Canadian RIF to an IRA?
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

No,
Simply continue to withdraw you RRIF as a pension, paying 15% to Canada, which will mostly cover any IRS tax.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
dimancea
Posts: 26
Joined: Thu Oct 28, 2004 6:35 pm

RIF/IRA

Post by dimancea »

Thank you, Nelsona.

I would like your opinion on a related issue. In addition to the RIFs accounts (mine and my wife's), we receive OAS and CPP payments that are deposited to a Canadian bank account. Since I don't need the money, at the moment, and the exchange rate is extremely unfavorable, I have accumulated a significant amount of cash in the account (over $150k).

I should also mention that we receive Social Security benefits and have RMD's from IRA's accounts in the States.

I understand that, as a US resident, I cannot, legally, invest the cash in Canada, except GICs, which pay almost nothing or real estate, which is too expensive and complicated.

I have, recently, talked to a financial adviser, affiliated with the Canadian bank, who offered to move all my Canadian assets (RIFs and cash) to an account managed by the firm. However, in order to have them manage the money, they want me to change my residence status, for tax purposes, to Canada. If I do that will I have to change the OAS and CPP benefits from a non resident, and no tax in Canada, to a resident subject to regular tax? And in general, will it not actually increase my tax liability to Canada and complicate the filing on both sides of the border?

Would appreciate very much your advice.
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

You cannot simply "change: your residency status. You can MOVE back to Canada if you wish, but to do this simply to satisfy this agent of the bank would seem foolish. Seems he just wnts to get your commissions.

If he is asking you to fake residency, he is unethical.

There are a couple of firms that can set up accounts for you because they are licensed across borders. Pacifica and Blackmont

If you really don't want to move your funds to US (I don't see why not), then try these firms, not some unethical bank.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

In my opinion, regardless of the exchange rate, which is historically right about average now, you made a mistake by accumulating so much in Canada.

Don't compound the problem by listening to someone who OBVIOUSLY has a vested interest in getting you to mess up your life.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
dimancea
Posts: 26
Joined: Thu Oct 28, 2004 6:35 pm

RIF/IRA

Post by dimancea »

Thank you for you sage advice, as usual. I agree that accumulating money in Canada was a mistake. Will try to correct it and will contact the firms you suggested.
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