Taxing Advice for US Person/Canadian Citizen

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jayaamit
Posts: 9
Joined: Thu Jun 02, 2016 9:54 pm

Taxing Advice for US Person/Canadian Citizen

Post by jayaamit »

Hi All,

I believe these topics must have been discussed several times before and I did go through some of the suggestions on the various posts, but my situation is bit unique and hence I am not sure what to do or how to do it. So, here it is:

a) My wife and I own a business in Canada (holding incorporation and operating incorporation). We own the shares of the 2 incorporations (50% each). We are Canadian Citizens.
b) I got a job in USA and moved to USA on Sep 1st, 2015 on TN-1 Visa. My family didn't move at that time. Kids continued going to school in Canada. Kids finally moved to USA on 29th December, while my wife moved to USA on 9th Jan, 2016. Since we still have the business there in Canada - my wife keeps making trips back to Canada once every month for about 7-10 days every month.
c) We did sell our primary residence in Canada in December 2015. We were renting in USA till 9th May and purchased a property as our primary residence here in USA on 9th May 2016.
d) Till December of 2015 I also made couple of week-long trips back to Canada because my family was back in Canada. I haven't visited Canada since January but plan to do so in June. My wife didn't visit me at all in USA in all of 2015.
e) Based on the substantial presence test I was a non-resident of USA for tax purposes for 2015. So, I filed 1040-NR. My wife had no US gross income and didn't even visit USA at all in all of 2015 so she didn't file any USA taxes for 2015. I used her for spouse exemption on the 1040-NR.
f) In Canada both my wife and I filed 2015 tax returns as Canadian Residents. I declared my USA income and claimed the taxes paid in USA (both federal and state (Michigan)) in the Canadian Tax return (Province is Alberta).
g) We do have significant RRSP in Canada in Questrade (close to 400K in 4 separate accounts - self-directed and spousal - $200K each). Cost-basis of it being $300K.
h) We do have close to $80K in our TFSAs also in Questrade ($40K each).
i) We also have close to $150K in chequing account in Canada.
j) We also make contributions to RESP plans for our 2 daughters (14 yr old is a Canadian Citizen, and 11 yr old is a dual-citizen - both Canadian and US citizen).
k) We have given close to $300K as loan to our business (incorporation).
l) The RESP Plan is with Knowledge First Financial (a Group Plan) and is worth $40K ($20K for each kid).

Now here come my questions - some of them you could already guess:
i) If we file our taxes as a non-resident of Canada and a resident of USA for 2016 then what happens to our business? We have a car still in Canada, auto insurance, our life insurance, disability insurance and critical illness insurance is still in Canada. We don't have any residence but our car, jewelery, some clothes and furniture is in a garage at a friend's hose in Canada. Due to owning the business that we are still running in Canada and the other factors and with not all ties cut from Canada - are we still considered as residents of Canada or of USA?
ii) What should we do regarding RESP, RRSP, TFSA (480K CAD) and the money in the chequing account (150K CAD)?
iii) What should be the date when we became US residents? Is it when the whole family moved to USA - 9th Jan 2016, or is it when I moved to USA (1st Sep 2015), or is it when my kids moved (29th Dec 2015), or is when this tax-year begins (1st Jan 2016), or is it when we purchased the house (May 9th, 2016), or is it when we say we are (we file form 8840 and claim close ties to Canada due to our 2 incorporations in Canada that my wife and I are still managing remotely)?
iv) If we do have to hire a cross-border specialist to handle our situation then who do most people recommend?
v) Is it too late now to liquidate our TFSA or to transfer the RRSP to TD Waterhouse? I am afraid that as soon as I tell the banks and Questrade that I am a US Person for tax purposes they would ask me to sell the funds. I haven't sold anything in my TFSA, or RRSP since we moved to USA.

Any help is much appreciated. Thanks in advance.
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

Your date of non-residency was jan 8 2016.

All other questions have been dealt with on this board. The time to consult an expert was last summer, BEFORE leaving.

Nothing is "too late", but sine nothing was done before you left, there will be tax and reporting consequences.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
vansree
Posts: 9
Joined: Thu Mar 23, 2017 1:48 pm

Post by vansree »

Hi Jayaamit,

I know this post is little old. Can you share your filing details so that I can do the same... Thanks

email is same as my id at yahoo ... in case you want to send the details.. thanks Sree
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