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

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Moving to Canada with investments
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Each year I help over 500 clients file their Canadian and US tax returns as well as plan for both their Canadian and US investment accounts. I also regularly help new US clients plan for their move to Canada.

Feel free to reach out via email at phil@philhogan.com or by phone or text here 250-661-9417.




Question

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.

I’ve done some research on taxes and it seems like although we’ll need to file both Canadian and US tax returns we won’t have to pay double tax because the treaty between the countries alleviates this potential.

We have a good investment advisor in California however he said we won’t be able to help us manage our investments if we move to Canada. Do you know anyone in the US that can help with Americans moving to Canada. Can we somehow transfer the accounts to Canada without having to liquidate them and pay extra tax?

We have the following accounts:

  • ROTH IRA
  • Traditional IRA
  • Inherited IRA from my Dad
  • regular investment accounts (mostly stocks and some ETFs)
  • One rental condo
  • A small amount of Bitcoin

My Mother is in relatively good health, however she’s over 90 and we will be expecting a fairly sized inheritance in the future.

We’ll also need some extra cash for the purchase of a condo in Victoria, especially if the Cali condo doesn’t sell before we buy something in Victoria.

Would love to chat with you about the issues outlined above. Do you offer consultations on taxes and investments or only tax preparation?

Sincerely

XXXXXXX

Answer

Hi XXXX

Thanks for your email. We’ll likely need to flush out all these issues over the phone or a zoom call, however let me give you some information that may be of value.

  • It’s great that you’re already planning before you enter Canada. This will allow us to review your investments and make any changes before you enter Canada and become a Canadian tax resident.
  • As you mentioned above, most US investment advisors cannot manage accounts for Canadians, therefore your best option will be to transfer you accounts to a Canadian investment advisor that can manage both US and Canadian accounts including IRAs and ROTH IRAs.
  • Yes, you’ll need to file both Canadian and US income tax return when you move to Canada. In addition to the filings and various treaty elections you’ll also need to file foreign income and assets disclosures for both Canadian and US tax purposes. Namely form T1135 (Canadian) and FBAR forms (USA).
  • If the bitcoin is held in on a crypto exchange it’s likely ok to stay, however you could move it up to a Canadian crypto exchange like bitbuy.ca if you want to move it out of the US.
  • When you move to Canada all your non-registered assets (excluding accounts like IRAs) will be revalued for cost basis purposes upon entry. We can discuss this in more detail later, however this rule is in place to ensure you don’t pay tax on your accrued gains when you move to Canada. That being said, you may want to consider selling any loss positions before entering Canada. If these positions recover after you enter Canada you could end up paying Canadian tax on a position that is still underwater.
  • Whether the condo sells before or after entering Canada likely doesn’t matter much as you’re filing US tax returns regardless. That being said, if it sells before entering you would be able to avoid all the calculations required for Canadian purposes.

I hope the above has helped clarify some issues. Let me know when you have 30 minutes or so and we can schedule an intro call.

Cheers

Phil

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