PFIC Avoidance While Investing

Chuzz · Post by **Chuzz** » Sat Mar 03, 2018 4:00 pm

Hello!

I am a US citizen moving to Canada. I have investment funds in the US (Roth IRA and other brokerage), but will now be receiving income in CAD. Investing that money has me worried about PFIC implications.

Is it worth converting my CAD to USD, sending to my US brokerage account, and investing from there?

Are there ways of investing my CAD in SEC-registered ETF's Canada without incurring PFIC tax?

Are Canadian tax-protected accounts subject to PFIC?

Thanks for the help!

nelsona · Post by **nelsona** » Sat Mar 03, 2018 4:12 pm

As a Cdn resident you will no longer be allowed to deal in your US brokerage account. CDn securities rules prohibit US brokers from handling Cdn resident's investemnts, other than in a caretaker or selling role.

So, you will need to find investments sld through Cdn brokers that are not PFIC's, which I'll let others inform you about.

whiterhino · Post by **whiterhino** » Mon Apr 16, 2018 12:13 am

Most Canadian brokerages will allow you to buy/sell on US exhanges, hence avoiding the issue nelsona raised as well as the PFIC issue from the US tax standpoint. If this is your chosen route, then you should look for a brokerage with reasonable exchange rates.

MaggieA · Post by **MaggieA** » Mon Apr 16, 2018 12:25 am

Canada will treat your Roth as non-taxable if and only if you (a) never make a contribution to it while you're a Canadian resident and (b) send a letter electing to defer taxation on it to the Canadian Competent Authority. Otherwise Canada will tax you on the earnings in it.