# US/Canadian business/residency issue



## Iswhatitis (May 15, 2012)

I'm a US and Canadian dual citizen residing in Canada. I've lived and worked here for the past 15 years.

Now I have the opportunity to take a contract in the US, working remotely. SO I could continue to live here, in the US or in a tropical island presumably. Contract computer work is considered as taking place where the arse is located, so if I did it in Canada it would be taxed in Canada first, and reported on my US return I GUESS.

However there is a complexity. They need me to be incorporated. If I start a corporation in Canada as a US citizen it creates headaches reporting it on my US as a CFC.

So I am wondering, is there a way that I could start a a sub-chapter S in florida, where my parents live, and I can provide an address and take the payments there? I would pay the lower US tax rate presumably. 

Does anyone know would Canada then credit the tax paid if it went through a sub chapter S, and would tax be calculated after deductions, even though Canada doesn't have a subchapter S? 

Would I need to even report the income on my Canadian return if it paid in the US 
and the contract was US based? Maybe if I am seated in Canada it would be, but elsewhere not...

I think this avoids the whole foreign holding company thing and saves on reporting costs. The US would be happy since the company is in their jurisdiction, and Canada 
may not care if I own the US company - maybe they do. I'm not sure.

Not a typical question ... any thoughts?


----------



## Iswhatitis (May 15, 2012)

Should at that the job in question would be 3 months a year, so that I could live in the US to get paid as a US citizen during that time. Not sure if I'd be considered a resident,
but if I was paid in the US and paid taxes there, would I need to report this on my Canadian form?


----------

