# Investment Account for Dual Citizen



## smccarth

I'm interested in signing up for an online discount brokerage account for investing outside of my RRSP. The account would probably be within my corporation. I plan to buy Canadian stocks only.

Does anyone know if I be asked about my citizenship by the brokerage company?

I realize that I will have to include this account in future FBAR's if I retain my U.S. citizenship. However FATCA doesn't come into effect for sometime and I'm hoping that, with the pending election, it doesn't survive in it's present form (or at all!).

So I would prefer to not declare myself to Canadian banks or Financial Institutions quite yet.
Any advice is appreciated.


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## Bevdeforges

You will probably need to provide identification documents of some variety. (Part of the Know Your Customer program that is worldwide, not just for US citizens.) Provide your Canadian i.d. and see what happens. If they ask if you are American or not, you should answer truthfully. 

But, as long as you report your gains, losses and earnings on your Canadian and US income tax filings, the FBAR report is pretty simple and should pose no risk to you.
Cheers,
Bev


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## pwdunn

smccarth said:


> I'm interested in signing up for an online discount brokerage account for investing outside of my RRSP. The account would probably be within my corporation. I plan to buy Canadian stocks only.
> 
> Does anyone know if I be asked about my citizenship by the brokerage company?
> 
> I realize that I will have to include this account in future FBAR's if I retain my U.S. citizenship. However FATCA doesn't come into effect for sometime and I'm hoping that, with the pending election, it doesn't survive in it's present form (or at all!).
> 
> So I would prefer to not declare myself to Canadian banks or Financial Institutions quite yet.
> Any advice is appreciated.


I opened up an account at Questrade. I did not fill out a single form that required my SSN. They did not require it.

Are you a Canadian citizen? It makes a difference. See this post: Dominant (and effective) nationality and why it matters | The Isaac Brock Society


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## pwdunn

Bevdeforges said:


> You will probably need to provide identification documents of some variety. (Part of the Know Your Customer program that is worldwide, not just for US citizens.) Provide your Canadian i.d. and see what happens. If they ask if you are American or not, you should answer truthfully.
> 
> But, as long as you report your gains, losses and earnings on your Canadian and US income tax filings, the FBAR report is pretty simple and should pose no risk to you.
> Cheers,
> Bev


The truthful answer to the question of whether you are an American citizen is, "None of your d--- business."

FBAR poses no risk, except the wilful and non-wilful fines. Penalties of up to 50% of your account holdings (per year for six years).

But admittedly, with Nina Olson's recent action, the risk may be getting slimmer. See: Federal Tax Crimes: Tax Notes Discusses Dispute Between the Taxpayer Advocate and the IRS About OVDP 2011 (1/6/12)
She has just ordered the IRS to treat all OVDI victims as "non-wilful" unless there is hard evidence to suggest otherwise.


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## smccarth

PetrosResearch said:


> I opened up an account at Questrade. I did not fill out a single form that required my SSN. They did not require it.
> 
> Are you a Canadian citizen? It makes a difference. See this post: Dominant (and effective) nationality and why it matters | The Isaac Brock Society


Thank you for the reply. That is the information I was looking for. Yes, I'm a Canadian citizen, and thanks for the link.


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## pwdunn

smccarth said:


> Thank you for the reply. That is the information I was looking for. Yes, I'm a Canadian citizen, and thanks for the link.


Your Canadian citizenship makes a big difference in these matters. Basically it means that the Canadian government isn't going to help the IRS to shake you down.

Be glad that you have it already. I urge anyone living in Canada to get your Canadian citizenship as soon as possible, if you are worried about these issues of Expat taxation and FBAR.


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## Ladyhawk

PetrosResearch said:


> The truthful answer to the question of whether you are an American citizen is, "None of your d--- business."


But this will make you "recalcitrant" and therefore - once FATCA comes in - they could then withhold 30% of US derived income that moves through that institution into your account. Of course f you have no US derived income, that would not be a problem. Just don't buy any mutual funds. You never know what those funds will carry.


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## Guest

Ladyhawk said:


> But this will make you "recalcitrant" and therefore - once FATCA comes in - they could then withhold 30% of US derived income that moves through that institution into your account. Of course f you have no US derived income, that would not be a problem. Just don't buy any mutual funds. You never know what those funds will carry.


Also don't buy any US Savings Bonds or US Treasury Bills. And sell any you have as soon as they mature ...

Now that raises the interesting question of how the hell do the geniuses in the US Treasury think they're going to continue to finance the US national debt, if people bail out of all US government securities? Especially the good folks in China, which we've heard has told the US it will NOT comply with FATCA. However that's the US' problem not ours. And Obama's in November, if the economic doo-doo resulting from FATCA starts hitting the fan by then.


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## pwdunn

Schubert said:


> Also don't buy any US Savings Bonds or US Treasury Bills. And sell any you have as soon as they mature ...
> 
> Now that raises the interesting question of how the hell do the geniuses in the US Treasury think they're going to continue to finance the US national debt, if people bail out of all US government securities? Especially the good folks in China, which we've heard has told the US it will NOT comply with FATCA. However that's the US' problem not ours. And Obama's in November, if the economic doo-doo resulting from FATCA starts hitting the fan by then.


I just received from the Chinese $10.08 per share of Daylight Energy, a premium over what comparable Canadian intermediate oil companies are costing. I know where the Chinese money is going to go: out of US government debt and into resources, including Canadian resources. When the yanks see that they are going to get jealous and want to occupy Canada, but it will be the Chinese that will hold them at bay, just as they are doing for the Iranians. There are two powers in the world today. The Americans and the Chinese, who consider the Americans lazy.


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## smccarth

Schubert said:


> Also don't buy any US Savings Bonds or US Treasury Bills. And sell any you have as soon as they mature ...
> 
> Now that raises the interesting question of how the hell do the geniuses in the US Treasury think they're going to continue to finance the US national debt, if people bail out of all US government securities?
> 
> I am only going to buy Canadian securities in this account. I'm a small investor who is lucky enough to have a little extra capital to put to work. Hopefully, this will help to speed retirement...
> 
> Like you, I am mystified at the myopia of the present U.S. government when it comes to the effect FATCA will have on foreign investment in the U.S. securities.
> 
> I can recall a time when financial advisors were unhappy that one could only hold 30% U.S. securities in RRSP's. Isn't it ironic that we now view them as "toxic assets"!


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## KalC

smccarth said:


> Schubert said:
> 
> 
> 
> Also don't buy any US Savings Bonds or US Treasury Bills. And sell any you have as soon as they mature ...
> 
> Now that raises the interesting question of how the hell do the geniuses in the US Treasury think they're going to continue to finance the US national debt, if people bail out of all US government securities?
> 
> I am only going to buy Canadian securities in this account. I'm a small investor who is lucky enough to have a little extra capital to put to work. Hopefully, this will help to speed retirement...
> 
> Like you, I am mystified at the myopia of the present U.S. government when it comes to the effect FATCA will have on foreign investment in the U.S. securities.
> 
> I can recall a time when financial advisors were unhappy that one could only hold 30% U.S. securities in RRSP's. Isn't it ironic that we now view them as "toxic assets"!
> 
> 
> 
> How many people know that if they have $60,000 worth of US securities when they die, that those are subject to US estate taxes? this applies whether or not you are a 'US Person'
> 
> Of course, how they find out is beyond me.
Click to expand...


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## Bevdeforges

KalC said:


> smccarth said:
> 
> 
> 
> How many people know that if they have $60,000 worth of US securities when they die, that those are subject to US estate taxes? this applies whether or not you are a 'US Person'
> 
> Of course, how they find out is beyond me.
> 
> 
> 
> Where are you getting this from? The $60,000 threshold only applies to non-resident alien spouses (i.e. amounts inherited by them). Otherwise, the estate tax threshold is still somewhere north of $1 million.
> Cheers,
> Bev
Click to expand...


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## Bevdeforges

Ladyhawk said:


> But this will make you "recalcitrant" and therefore - once FATCA comes in - they could then withhold 30% of US derived income that moves through that institution into your account. Of course f you have no US derived income, that would not be a problem. Just don't buy any mutual funds. You never know what those funds will carry.


Has anyone here actually been asked by their bank or broker whether or not they have US nationality? (And I'm talking about AFTER opening an account with a Canadian or other non-US identity document.) If you opened an account with US i.d. and your birthplace is in the US, there's probably nothing you can do.

But have the banks actually started asking their customers about US nationality?
Cheers,
Bev


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## Mona Lisa76

I wouldn't be surprised if the US makes it more difficult to buy non-US stocks and bonds with perhpas similar tax treatment to foreign mutual funds. They may also introduce restrictions on outflow of capital from US borders. As I live in the UK, it seems I should sell my US funds and remit the cash before they place annual restrictions, etc.


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## KalC

Bevdeforges said:


> KalC said:
> 
> 
> 
> Where are you getting this from? The $60,000 threshold only applies to non-resident alien spouses (i.e. amounts inherited by them). Otherwise, the estate tax threshold is still somewhere north of $1 million.
> Cheers,
> Bev
> 
> 
> 
> I know it's hard to believe. I didn't believe it either when told by my broker.
> google _'non residents with US assets must file estate tax returns'_
> 
> This is an excerpt.
> 
> _Executors for nonresidents must file an estate tax return, Form 706NA, United States Estate (and Generation-Skipping) Tax Return, Estate of a nonresident not a citizen of the United States (PDF), if the fair market value at death of the decedent's U.S.-situated assets exceeds $60,000. If the decedent made substantial lifetime gifts of U.S. property, and used the applicable $13,000 “unified credit exemption” amount to eliminate or reduce any gift tax on the lifetime gifts, a U.S. estate tax return may still be required if the value of the decedent’s U.S. situated assets is less than $60,000 at the date of death (due to the decrease in the “unified credit exemption” for the lifetime gifts)._
> 
> Taxes will probably not be owed and it would be difficult for the International Robbers Society to know about small holdings but executors and accountants of the large firms with US ties are personally liable and would feel the need to comply. One more good reason to avoid US assets
Click to expand...


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## Bevdeforges

KalC said:


> Bevdeforges said:
> 
> 
> 
> I know it's hard to believe. I didn't believe it either when told by my broker.
> google _'non residents with US assets must file estate tax returns'_
> 
> 
> 
> That's SOP just about anywhere in the world. For estate taxes, at least for real property (buildings and land), it's where the property is located that determines what laws apply (and who gets to tax the estate). The US perhaps takes things to the extreme (so what's new there?) but I suppose that's what Canadian brokers are for.
> Cheers,
> Bev
Click to expand...


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## Guest

smccarth said:


> Schubert said:
> 
> 
> 
> Like you, I am mystified at the myopia of the present U.S. government when it comes to the effect FATCA will have on foreign investment in the U.S. securities.
> 
> 
> 
> Myopia:clap2: You should be a diplomat. There are many adjectives and adverbs I am tempted to use to describe the US government's policies in FATCA, taxation and a lot of other things (many of which words would be censored by the software or moderators on this forum, and probably rightly so), but "myopia" isn't one that would have occurred to me. But yes, it certainly is myopic, among other things.
Click to expand...


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## Guest

KalC;686409
International Robbers Society [/quote said:


> :clap2::clap2::clap2:


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## Arlington

Bevdeforges said:


> Has anyone here actually been asked by their bank or broker whether or not they have US nationality? (And I'm talking about AFTER opening an account with a Canadian or other non-US identity document.) If you opened an account with US i.d. and your birthplace is in the US, there's probably nothing you can do.
> 
> Bev


My broker had to update all our know your customer forms when I was having my inheritance transferred to Canada. He knows damn well that I'm an American. I told him I wasn't willing to reveal that information. He completed all the forms and checked the Canadian box for me. I signed the forms and sent them back. That was before I was tax compliant but I haven't bothered to correct it.


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## Arlington

I have a lot of mutual funds but they are all within RRSP accounts. For FBAR, I sent in the account number for each RRSP with total balance, not identifying the investments. . . ignoring the PFI requirements which are beyond onerous. 

Am I in trouble?


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## KalC

Arlington said:


> I have a lot of mutual funds but they are all within RRSP accounts. For FBAR, I sent in the account number for each RRSP with total balance, not identifying the investments. . . ignoring the PFI requirements which are beyond onerous.
> 
> Am I in trouble?


If pfi means pfic, you are ok for now. Pfic's within rsp s are ok Google 'pfic within rrsp' you may find what I found. It's rather vague


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## Arlington

KalC said:


> If pfi means pfic, you are ok for now. Pfic's within rsp s are ok Google 'pfic within rrsp' you may find what I found. It's rather vague


Yes . .PFI means PFIC. Since I never used it, I can't be bothered to remember it correctly.

Thanks for the information . .that makes me feel better.


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