Moved up to Canada with 401k, investments and LLC business assets


I have helped hundreds of people successfully navigate from the US to Canada. If you're thinking of moving or retiring to Canada contact me today to chat about your plans.

I can be reached via email at, by phone at 250-661-9417 or through my contact page here.

I look forward to speaking to you soon.

Phil Hogan, CPA, CA, CPA (CO)
Cross-Border Tax and Investment Specialist


Hello Phil – I found your website by a search for top rated cross border business accountants, and watched a few of your podcast/videos – thanks for sharing such useful information! It gives me a lot of confidence that you can help with our somewhat complicated cross border situation.

I left you a voicemail earlier today, and figured I’d follow up with an email. I’m interested in a call to review our situation and understand what aspects of our tax needs you can support.  I’ll give a brief summary below.

I am a dual CAN/US citizen, as are our 3 kids. My husband is a US citizen and now a Canadian Permanent Resident. We moved from NY to ON in July 2021.  We worked with a big firm in Ontario to do our Canadian taxes for 2021, but it was a mess and I am very unhappy with the level of support and information they provided.  I still have so many questions that they did not (or could not) answer.  We are looking for a new accountant for 2022 and beyond. Our situation is fairly involved with both W-2  and 1099 income for my spouse, and 1099 and LLC income from the US for myself. I learned the hard way that an LLC is a bad idea and have mostly wound that down, and am now operating as self employed only, however all of my clients are in the US.  I have an outstanding business tax filing from 2021 as well.  Prior to 2021 I have always done our taxes myself without issues, but the move made things complicated and we had hoped working with a big cross border firm would help (it didn’t).

We are looking for:

Personal tax guidance – managing cross border issues

Investment guidance – 401k, IRA, RRSP, taxable investment accounts – keep in USA vs move to Canada (the detail required for the T1135 makes me want to move it all here!)

Business tax guidance – I would like to set up a Canadian corporation for my work, and for new business ideas, but am unsure of how to do the US tax side of things.

Potential set up of new Canadian corporation & T2 filing (formation in early 2023)

2022 T1 filings – will be full year residents of Ontario, but with income from USA. I want to see a year of the T1 being done correctly before I take on doing it myself in the future.

Support for US 1040 – same as the T1 – I want to have a year of guidance to know it is done right before I go back to doing it myself. **we have to amend our 1040 and NY IT-203 due to revisions from CRA – I would like to get a review before we submit it in case there are other issues

General financial planning support to mitigate punitive taxation due to USA/CAN overlap.

I know tax season just ‘ended’ with the passing of the June 15th deadline, but we have some outstanding 2021 items to deal with and I want to have a solid plan for 2022 long before tax time. Our T1s were not finalized until June 13th (I started with the firm in Feb and it was like pushing a rope to get anything done before the last minute) which is MUCH later than I am comfortable with. I like to file in March to get it out of the way, so this was super stressful!

Looking forward to speaking with you soon.




Thanks for the email and for also for supporting the podcast. I’m glad the content has been helpful.

You certainly have a lot doing on here. Let me give you my general thoughts and then we can circle back around for a longer consultation if needed:

  • Yes, as you point out the LLC structure doesn’t work well for Canadian tax residents. Operating as a sole proprietorship is likely the best option as incorporation will significantly complicate your tax filings (form 5471 and other) and likely will not provide additional tax benefits overall. Also, by maintaining the LLC you’ll also be required to file form T1134 which can be very difficult to prepare.
    • Incorporating as an American in Canada has changed significantly since the Trump tax changes. Now, not only can we not defer investment income withing Canadian corporations for US purposes, but active business income will not be able to be deferred. Also, the cost to prepare and file the 5471 in most cases exceeds $3,000 annually. And that doesn’t include the cost of the T2 prep. There’s nothing wrong with additional annual accounting costs if it provides value, however in this case it likely won’t.
  • For families moving up to Canada permanently I almost always suggest moving investment assets up to Canada. Not only do you want to properly optimize the portfolio from a Canadian tax perspective, as you mention, the T1135 reporting is horrendous if the assets remain in the US. By moving the assets up to Canada you’ll be able to opt-in to the “simplified approach” to filing the T1135. If the assets remain in the US each individual security needs to be reported on form T1135. Not only that, but the disclosure requires a complicated cost basis calculation that may not be available from statements produced by your broker.
    • I would suggesting using a cross-border investment firm that has licences on both sides of the border. If you need a referral please let me know.
    • We’ll also need to properly adjust the cost basis of individual securities in the non-registered portfolio to ensure you don’t pay additional Canadian tax on accumulated gains from before you become a Canadian tax resident.
  • We should take a look at the 2021 T1 to ensure the CRA proposed adjustments are correct and require adjustments. The calculation of foreign tax credits is imperative to ensure you don’t pay double tax.

It will also be important to properly review any investment planning contributions such as additional RRSP contributions. Given incorporation is likely not a great option optimizing either regular or spousal RRSP contributions will be key.

You may not already have RRSP room, but we can review your CRA account to assess the balance.

Hope that helps.




  1. Hello Phil. Do you know what information is needed for the cost basis calculation you mention in the following statement?: “If the assets remain in the US each individual security needs to be reported on form T1135. Not only that, but the disclosure requires a complicated cost basis calculation that may not be available from statements produced by your broker.”

    I’d like to find out if my brokers provide the details needed. I’m with Vanguard and Interactive Brokers.

    Thank you!


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