F.A.Q.

Got Questions? I’ve Got Answers!

There are some frequently questions you might have in your mind. If you have any other questions, please contact me directly or send me an email. Contact Us page.

Please refer to the “Services” page for the answer.
It depends on your tax situation.
No. The sooner we get your basic information the better. We can create your tax profile by completing a tax interview with you.
You can rollover (direct roll over) your IRA to your RRSP. if you wish to roll your U.S. retirement plan into a Canadian RRSP account you have to be really careful. Generally, if the employer contributed to a U.S. retirement plan while the employee was a resident of the U.S., a rollover into a Canadian RRSP would be possible without affecting the RRSP contribution room. However, if an employer contributed to the plan while the employee was a resident in Canada, the employee would not be allowed to roll the plan into an RRSP account on a tax-free basis. The lump-sum payment of the retirement plan would be included in taxable income for the year; however, it may be possible to shelter part of the transfer if there is available RRSP contribution room.
There are no provisions in the U.S. that allow a rollover of RRSP to an equivalent Individual Retirement Account (IRA).
You have to meet all of the following conditions to be able to deduct your truck expenses:

  • You were normally required to work away from your employer’s place of business or in different places.
  • Under your contract of employment, you had to pay your own motor vehicle expenses
  • You did not receive a non-taxable allowance for motor vehicle expenses.

And your employer has to complete and sign CRA Form 2200 (declaration of Employment, and the employer has to answer “yes” to questions 1 &2). The types of expenses you can deduct include:

Since you use your car for both employment and personal use, you can deduct only the percentage of expenses related to earning income. To support the amount you can deduct, keep a record of both the total kilometers you drove and the kilometers you drove to earn employment income. Please note that the CRA consider driving back and forth between home and work as personal use.

Roth IRA is similar to TFSA (Tax Free Saving Accounts) in Canada.

Roth IRA is non-taxable in Canada. According to the Canada – U.S. Tax Treaty, Roth IRA will lose its “pension” status should a Canadian resident make any contributions to it; the only exception to this rule is if the payment is a rollover contribution from another Roth IRA. If any other contributions are made, the resulting growth from the time of the contributions will be subject to Canadian income tax in the year of accrual.

Yes, after the Supreme Court issued the Windsor decision, the common law partners now can file jointly for U.S tax purposes.
You contributed 100 per cent of the funds to acquire the property and that both you and your husband took title to the property as joint tenants.
When the property is sold the U.S. will attribute 50 per cent of the gain to the husband and 50 per cent of the gain to the wife (US does not have spousal attribution rules). For Canadian purposes, the results may be quite different. CRA could argue that since the wife has contributed 100 per cent of the funds to purchase the property she should be taxed on 100 per cent of the gain. If this is the result, the U.S. tax paid by the wife, if any, could be forever lost for Canadian tax purposes.
Under the following two conditions , you would be able to get a refund:

1. Tax was withhold from winning from blackjack, baccarat, craps, roulette or big-6 wheel;

2. You also had US gambling losses. Under Canada-USA Tax treaty , losses incurred on wagering transactions of Canadian residents, the gains of which would be subject to the 30% withholding tax, shall be deductible to the same extent that losses would be deductible if they were incurred by a U.S. resident. So it means the gambling losses can be used to offset some or all of the gambling winnings for the same year, but you have to keep a good record for your gambling losses.

Correct, LLC is a best choice for a US citizen not for Canadian as we do not have a similar structure in Canada. So Canada treats a LLC as a corporation.

A US C-Corp- there are good side and bad side to the C-corp. Good side is the estate taxes as the corporation never dies if the owner dies. Bad side: if you sell the property and your property appreciated in value then the capital gain will be taxed at 35% tax rate for a corporation; while as an individuals the tax rates that apply to net capital gains will usually depend on the individuals tax bracket (for 2014 up to $36,900 of gain for a single taxpayer is exempt). Although the maximum net capital gain tax rate rose from 15 to 20 percent in 2013, a zero or 15 percent rate continues to apply to most taxpayers.

I cannot cover all issues here if you need more info please contact me.

There has been changes in tangible regulations which may affect you as you are holding a US real estate. While the acquisition rules are substantially the same, changes were made to clarify certain provisions. These new regulations surrounding repairs & maintenance, supplies and materials, depreciation, improvement and dispositions of tangible property. The new regulations provide taxpayer favorable safe harbors, elections and other modifications intended to simplify and add flexibility in their application.

Elections or additional forms (IRS Form 3115) may need to be filed with your 2014 tax return. These form and elections are MANDATORY in 2014 and going forward.

Because you owned a rental property prior to 2014 and claimed current and previous years repairs and depreciation. It tells me that you need to review all previous years depreciation and repair/maintenance expenses and may need to make adjustments under the new regulations. Please contact my office for further assistant. 2015/02/10

Update:2015/02/13-This afternoon, the IRS released new rules related to filing Form 3115. Although I am still analyzing the full extent of this IRS release, it appears that the intent of the IRS pronouncement is to provide relief to small taxpayers from the burden of filing the 3115.

01/15/2018- .

There are two ways to take distributions from 401K (if your plan allows you, please contact the financial institution to find out):

  1. a loan; or
  2. a hardship distribution.

1. If your plan allows you to take a loan, then you can take a loan to avoid any taxes or penalties;  You can take a loan amount equal to the lesser of half your account value, or $50,000; the loan repayment period is 5 years and you have to pay it back monthly.

2. If your plan allows you for hardship distributions, then you have to pay tax plus a 10% penalty (if you are under 59.5 years of age).

My first suggestion would be that you take a loan from your 401(k), because it is a non-taxable event.

The least favorable suggestion is taking a distribution under the IRS’s hardship rules, if your plan allows it. This distribution would be fully taxable and there is a penalty of 10%.

06/03/2015-Yes, there are two educations credits that can help you with the cost of higher education. You may be able to claim up to $2,500 as American Opportunity Tax Credit. The credit applies to the first 4 years of an eligible school. Also, 40% of the credit (up to $1,000) is refundable. This means you can get it even if you owe no tax. Please contact my office to discuss them further.
2018-01-16-US Form W9 is for a US resident/citizen; for Canadian you have to provide W8BEN. Part 1 of Form W8BEN is your personal information; on Part 2 Q9 you have to write “Canada” and on Q10 you have to provide treaty Article number, which in your case is “Article VII” and if you do not have a fixed base regularly available to you in the U.S., the income is taxable in Canada only, but you have to file a US Tax Return, IRS Form 1040NR along with Form 8833 (treaty based tax return) to let the IRS knows why your income is not taxable in the U.S..
2015-03-09-Deductible travel expenses include the following;

  • Cost of traveling by airplane, train, bus or car from a home to a business destination.
  • The cost of lodging
  • Half the cost of meals

While the cost of airfare to travel for business does qualify as a tax deduction, the IRS does not allow business travelers to take a deduction if they use frequent flier miles or similar program to travel. So there is no tax deductible expense when using frequent flier miles. Since tickets purchased with frequent flier miles are not tax deductible, you should paid for your tickets and save frequent flier miles for personal travel.

2018-02-12-CRA position on US LLPs and LLLPs formed after April 25, 2017, will be treated as corporations for Canadian tax purposes, so no LLP or LLLP, the only option is LP.
Back to Top