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 firstname.lastname@example.org, 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
I got your name from XXXXX and you seem to be the perfect person to help me. Please let me know how I can book some time in with you soon as I would like to take care of this as soon as I can.
Here is my situation, I’m moving up to Vancouver from Washington state (I’m both a Canadian and US citizen and moved down to the US over 25 years ago) this year and I’ll be in full retirement mode in a few months. I might do some consulting work (I’m an environmental engineer), but that likely won’t amount to much. My biggest questions revolve around how to handle my US investments. I don’t plan on returning to Canada and I heard that it’s better to simply move everything up here.
By largest asset is my regular investment account at Fidelity. It’s currently investing in a mix of index funds and I tend not to trade in and out very much. I have yet to tell Fidelity that I’ve moved and I assume I’ll need to change my address soon. That may raise some questions on their end.
I also have a regular IRA and ROTH with them. I read on your site that I would need to file something for the ROTH with the Canadian tax authority and I would like to hear more about that.
This likely won’t happen for a while but I will be receiving a fairly large inheritance from my mother in the US. I think the all the money is currently in the trust and will need to understand that this would mean for me as a new Canadian resident. My mother said she would pay for any legal or tax advice required to make the transfer as simple as possible.
I also still have my main home down in the US and was wondering if I should sell it or rent it. Even with the recent downturn in the market I have quite a bit of equity in it and a very small mortgage
Anyways, that’s about it for me, would love to hear how I can connect with you.
Thanks for the email. You can setup your complimentary cross-border investment consultation here, however I can provide some general insights on your situation now to give you something to think about:
- Yes, we’ve seen lots of people at Fidelity be forced out of their accounts due to being resident in Canada. Most US brokers don’t have proper licensing to manage accounts for Canadian tax residents. We have solutions for both US and Canadian investment accounts including IRA, ROTH IRA and 401k management. We can discuss in more detail on what we can offer at our meeting.
- We also have solutions for your ROTH IRA and it may be beneficial to review a potential conversion of your traditional IRA to your ROTH if your income is relatively low before the move. If so, the transfer could save quite a bit of future Canadian tax. Essentially you’ll be able to pay tax at a low US rate and avoid future Canadian tax on IRA distributions. For example, if you were to convert $100,000 of IRA to ROTH at 10% tax this amount would be tax free going forward in Canada when it’s fully distributed. Assuming a Canadian tax rate of 20% that would be a $10,000 absolute tax savings for a simply conversion. Regardless you’ll want to ensure you file appropriate Canadian treaty elections for any ROTH IRA you bring across the border. You can read more about ROTH IRAs in Canada here.
- Inheriting assets via US trusts can be quite tricky. However it sounds like your mother is open to some planning which is quite positive. Let’s chat more about your options at our meeting.
- You can certainly start to rent your US home, however if it’s been your principal residence and has an inherit gain it might be more tax efficient to sell it. If it’s not sold within 2 years you may lose access to the US principal residence exclusion which would result in a fair amount of unnecessary US tax in the future. Once again, we can chat about the tax implications of the US house sale when we meet.
Hopefully the information above has given you some additional context on your situation. You can find a time here to book a complimentary consult to review your cross-border and investment questions.
I look forward to our meeting.