# US-Canada Tax advice...



## ealbers (Nov 12, 2008)

I recently got my ok to 'land' in canada, and I was thinking about the tax implications, and how I should handle my house in the states, my IRA etc.

Can anyone recommend a tax company which can give good advice on taxes for expats? 

I'd like to find a firm in or around toronto or northern ontario...anyone have suggestions?

Thanks!


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## NickZ (Jun 26, 2009)

Are you keeping the house or selling it before you leave? If you keep it and then sell it you face US taxes first .

The large US CPA firms have links in Canada. 

You shouldn't have any trouble finding somebody in Toronto. Northern Ontario might be a little different but other then the IRA it's not much different then the situation snow birds face. You might want to search google for tax advice for snowbirds.

When you say Northern Ontario do you mean Northern Ontario or just north of Toronto? Ontario is fairly large. Makes Texas look like a small postage stamp.


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## ealbers (Nov 12, 2008)

We are hoping to sell our house here this summer, though it didn't sell last summer....my biggest question is if I sell after 'landing' do I have to pay canadian taxes on the sale (or profit if any from it), or is it a USA taxable event?

We bought a farm 5 years ago in Warren ON, between North Bay and Sudbury near hwy 17...

Finding a firm in Toronto would be good, as we drive through all the time to get to our farm.

I did google, but most firms deal with 'Big' corp's and want min 3000 bucks to give advice...

The IRA question is most important, I'm unemployed right now (software engineer) and drawing from it a little to pay bills and will probably through this year. Do I have to pay taxes in Canada on the withdraws? Or just US taxes? If I put off 'landing' till June does it make a difference?

Lots of little questions

Thanks!




NickZ said:


> Are you keeping the house or selling it before you leave? If you keep it and then sell it you face US taxes first .
> 
> The large US CPA firms have links in Canada.
> 
> ...


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## NickZ (Jun 26, 2009)

Memory tells me real estate is taxed in the country the property is in. No idea about the IRA. 

There is a tax treaty between Canada and the US. The IRS website has the treaty and the IRS interpertation of the treaty. Surf over to the IRS website and download the docs.

CCRA(Canada Customs and Revenue) has an international tax office. IIRC they have documents online on coming to Canada. You can download a residence form. Fill out the form and send it in and they'll tell you if you will be a Canadian resident on your move date. A bit of search found

IT-122 United States Social Security Tax and Benefits

There is supposed to be a bulletin dealing with IRAs but I can't find the number. Email or phone the CCRA international office and ask. If the IT is online you can download it or order the document and have it mailed to you.


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## Bevdeforges (Nov 16, 2007)

I can speak for the US side of things. Not sure exactly how Canada handles "foreign source income" but there is a tax treaty between the US and Canada which should eliminate most chances of double taxation.



ealbers said:


> We are hoping to sell our house here this summer, though it didn't sell last summer....my biggest question is if I sell after 'landing' do I have to pay canadian taxes on the sale (or profit if any from it), or is it a USA taxable event?


Because the house is located in the US, it's the US that takes precedence (and the state where the house is located). If you sell after your move, you'll probably have to file a "non-resident" return for the state where the property is located. 



> Finding a firm in Toronto would be good, as we drive through all the time to get to our farm.
> 
> I did google, but most firms deal with 'Big' corp's and want min 3000 bucks to give advice...


Before forking over too much money to a "tax advisor" check to see if there is an IRS office at the Toronto US Consulate. The consulates normally put out some good information on taxes for US citizens living in the country - and it's free!



> The IRA question is most important, I'm unemployed right now (software engineer) and drawing from it a little to pay bills and will probably through this year. Do I have to pay taxes in Canada on the withdraws? Or just US taxes? If I put off 'landing' till June does it make a difference?


You'll have to pay all the US taxes on any premature withdrawals (i.e. regular income tax plus the early withdrawal penalty). As a US citizen, you're going to have to file US taxes no matter where you live in the world. And anytime you take money out of your IRA, you owe taxes first to the US (since the money was tax exempt when you put it in the IRA). 

Thanks to the tax treaty, though, Canada won't tax it again. You'll have to check with a Canadian tax preparer to find out exactly how to declare your IRA withdrawals so as not to be doubled taxed, but it shouldn't be a terribly difficult thing to do.

I've heard rumors that there is a Canadian branch (or maybe just equivalent) of H&R Block. That may well be all you need. The US side of things seems complicated at first, but once you've been through it a time or two it should go pretty quickly.

Just remember that you can't add anything to your IRA unless you have taxable US income that is considered "earned" (i.e. salary), so for most folks living outside the US, your IRA is pretty well frozen once you change residence.
Cheers,
Bev


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## NickZ (Jun 26, 2009)

> General Income
> Tax and Benefit
> Guide for Non-Residents and Deemed
> Residents of Canada – 2009


The above CCRA document 



> United States individual retirement account (IRA) – If you
> were a deemed resident of Canada in 2009, and, during
> 2009, you received amounts from an IRA or converted the
> IRA to a “Roth” IRA, contact the International Tax Services
> Office.


So sounds like chatting with the international office is your best option. Toll free number to. It's in the document.

http://www.cra-arc.gc.ca/E/pub/tg/5013-g/5013g-09e.pdf


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