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Cross Border Tax News 2021 (Updated January 23, 2021)

Here you’ll find updates on cross border tax issues for 2021. Please check back often for updates as this page will be revised for new cross border tax news items from month to month.

Update January 23, 2021

Updates on 3520 and 3520-A filings for TFSA accounts – Our colleague at Polaris tax, Max Reed has posted an update on an IRS appeals resolution regarding TFSA accounts and 3520 and 3520-A filings. The report outlines that the IRS agreed with the view that TFSAs held by US tax residents should not be considered “foreign trusts” for purposes of these filings, and therefore penalties assessed could be abated.… Read more...

Canadian Foreign Tax Credit on IRA Distribution


Hi Phil

I think I need some help with a tax matter that has developed.

I have an IRA in the US that I’ve just started taking distributions from. I move to Victoria from Colorado 10 years ago and I plan on staying in Canada until my final days.

I filed my Canadian return with a Vancouver CPA and he referred me to a US CPA to help file my US tax return. I was fine paying both accountants to help me file as I understand most do not file both styles of returns but I was surprised to receive a letter from CRA asking me for more money on my 2019 tax return.… Read more...

Should I transfer my US inheritance to Canada?


Hi Phil

I found you on your expat Youtube channel after doing some googling around to find some answers to some questions that I had.

I’ll be receiving an an inheritance from a relative in Texas some time in the next few months. Most of the money is in a Fidelity investment accounts down in the US.

I’ve already spoken to the investment specialist that is managing the account and they are asking me for a US address to keep the account opened.… Read more...

Canadian Tax on Inheritance from the US?


Hi Mr. Hogan

My Mother recently passed away (she lives in the US and I live in Canada) and I’ll be receiving a sizable inheritance some time next year once the estate is fully resolved and wound up. I’m really worried about how much tax I’ll need to pay on the inheritance. Here are more details on the amounts:

  • $250,000 in an inherited IRA
  • $50,000 in a ROTH IRA
  • Almost $2,000,000 in a Fidelity investment account
  • Cash proceeds from home (will sell soon)
  • Condo in the US that I’m not sure I will be selling.

Moving to Canada with Large ROTH IRA


Hi Phil

I stumbled across your site after researching some issues on google. I’ll be moving to Vancouver for work at the end of the year from Texas and I need some help with my US investments.

A few years ago I invested in some very speculative stocks within my ROTH IRA and I’ve been fortunate enough to have grown the ROTH to a sizable amount. I’m now worried that some or all of this will be taxed when I move to Canada.… Read more...

Moving from Canada and non-resident status


Dear Mr. Phil Hogan,

I’m a Canadian citizen who recently moved to the states for work. I came across your contribution to a Canadian news article about cross border income tax a few months ago when I was preparing for my move. Although the tax season is a bit far away right now, I would like to get your advice about my Canadian and American residency status for 2021, which will really help me figure out the duration of my stay in Canada for the holidays.… Read more...

How to transfer US investments to Canada, including ROTH IRA


Hi Phil

We spoke a few years back when my wife and I were planning on moving to Victoria. We put those plans off for a few years but now we’re committing to actually make the move next year.

To give you a recap on our situation…my wife is a dual citizen and I’ve applied for my Canadian PR. We hope to move close to March of next year.

We have the following assets

  • House in Washington (our principal residence)
  • Investments in ROTH, trad IRA, regular investment account and small company 401k
  • 2 cars and other household good

I’ve done a lot of research on what the tax returns will look like when we move, but we’ll certainly need help from someone like you to prepare and file the returns.… Read more...

Moving to Canada with IRA, ROTH IRA and Investments to retire


Hi Phil

My wife is a member of your Facebook group and she thought you would be the perfect person to talk to with respect to our situation.

My wife and I still be moving to Victoria early next year. Our kids are grown and are going to school at UCLA. My wife is Canadian and I’ll be applying for my PR shortly.

We have a good immigration lawyer so most of our remaining questions relate to taxes and investments.… Read more...

US Tax Return for American in Canada with SS Benefits



Thanks for the email. Given the length of your email I won’t be able to address all the issues below, however I’ll do my best to summarize some thoughts below:

  • Software for US citizens living in Canada doesn’t really exist. Those that try to file their own US tax returns often use something like Turbo Tax. You can take a look here for some guidance on filing.
  • The fact that you didn’t file US returns for some time while you were a resident of Canada is quite concerning.

“Advice” for new Real Estate Investor


Hi Phil

I’m moving to Victoria next month from Vancouver and I saw that you have a CPA practice on the Island. I’m reaching out in case you can help answer some real estate investment questions (also for a school project):

  1. What advice would you give to a new investor who is buying their
    first rental property?
  2. Are buy-and-hold exit strategies better for veteran or new investors?
  3. What are the most important things new investors need to look for in a rental

5 Options for Canadians with US IRAs- Expat Tax Podcast

On episode #5 of the Expat Tax and Financial Planning Podcast we discuss some options for Canadians holding US IRA accounts.

Whether you moved up to Canada with a pre-existing IRA or have inherited an IRA from a relative living in the US the following discussion should help you make a decision on what to do with your US IRA accounts.

Collapse the IRA and bring the money to Canada

  • A good option for small accounts
  • May work if your income is already low
  • Keeps things simple
  • 15% minimum tax for non-US citizens

Roll the IRA into a ROTH IRA

  • An option for Americans moving to Canada only
  • Works if your current tax rate is less than your future tax rate
  • Need Canadian ROTH election

Leave the IRA in the US

  • Simple option
  • Some US brokers can’t manage US IRAs for Canadians
  • Likely the US broker will not be able to take direction from Canadian clients
  • Foreign currency risk not properly managed
  • Most US brokers simply do not understand Canadian tax and financial planning

Transfer the IRA to an RRSP

  • Can help consolidate accounts
  • Works well for smaller accounts
  • Often suggested by Canadian investment advisors that cannot manage IRA accounts
  • Can only transfer approximately the amount of your Canadian source income for the year
  • May be able to eventually split RRIF payments
  • You’ll lose the ability to transfer IRA to beneficiaries tax-free

Transfer the IRA to a Canadian border with both a US and Canadian securities license.Read more...

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