# How are US Tax deferred Annuitities handled in Canada for new PR?



## Blusch (Mar 29, 2009)

We are Americans about to move to Nova Scotia, Canada as Permanent Residents and are wondering how to handle our TDA's. Is there any sound reason to liquidate them in the US before taking up our Canadian residency despite their penalty costs? How will they be taxed in Canada if we wait until we are Canadian permanent residents? Can anyone provide any tax advice or recommend someone who can?


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## Bevdeforges (Nov 16, 2007)

I'm not knowledgeable about Canadian taxes, but in the case of things like Tax Deferred Annuities, you'll most like wind up paying US income taxes on them as they pay out. Canada has a tax treaty with the US (like many other countries) and the general rule is that investments like this continue to be taxed by the country generating the income - the US in your case.

As US citizens, you continue to be subject to US income taxes no matter where you live in the world, though with allowances for income earned while resident overseas. By definition, investment income is considered "unearned" and thus remains taxable in the US. Canada probably has some work around - either tax credits or some form of deduction/exemption for revenue taxable elsewhere.
Cheers,
Bev


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## nmreich (Feb 16, 2009)

Good question, Bev. 

Let us know if you find out more information.


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