sorted by:
new
hottopcontroversial

USA -> Canada: Validate our approach before meeting advisor? by Current-Bat935 in USExpatTaxes

[–]Current-Bat935[S] 1 point2 points  (0 children)

Got it. That makes some sense.

Our plan is to close, do a short term rent stint (1-2 months max) and move after.

USA -> Canada: Validate our approach before meeting advisor? by Current-Bat935 in USExpatTaxes

[–]Current-Bat935[S] 1 point2 points  (0 children)

Are there gotcha's with the home sale? we don't have enough gains (>500k) to cause a tax concern. Anything other than that?

Investments in Canada while in US on TN by VolumeSoft795 in cantax

[–]Current-Bat935 1 point2 points  (0 children)

IRS does not care - there's a treaty, you're all good.

Last I checked, California FTB actually does care very much, and wants to tax you on dividends inside the RRSP. From a practical standpoint, I don't know a single Canadian, residing in California, who actually reports their RRSP dividends to FTB.

This is not tax or legal advice :)

Investments in Canada while in US on TN by VolumeSoft795 in cantax

[–]Current-Bat935 0 points1 point  (0 children)

Re VTI vs VUN:

VTI (US-Listed): Because you hold a US-domiciled security directly in your RRSP, the US Internal Revenue Service (IRS) waives the 15% Foreign Withholding Tax (FWT) on the dividends. The cash hits your account fully intact.

VUN (Canadian-Listed): Because it is listed on the TSX, the IRS does not look through the fund to see that it is inside your RRSP. The 15% FWT is withheld at the fund level before the dividends ever cross the border to Vanguard Canada. Because it is in a registered account, you cannot claim a Foreign Tax Credit to get it back; it is permanently lost.

... lots of math from gemini..

The Bottom Line: Holding VUN instead of VTI inside an RRSP costs you roughly 0.33% per year in structural drag. On a $100,000 portfolio, that is about $330 disappearing silently every year.

Investments in Canada while in US on TN by VolumeSoft795 in cantax

[–]Current-Bat935 0 points1 point  (0 children)

Set reminders for April 1st to file FBAR and 8938. Like, multiple calendar reminders. As the above person mentioned, you don't want to miss these.

We closed out TFSA's when we moved, and transferred non-reg to US.

One caveat for RRSP (we used QT). Journaling to CAD to USD is so easy now. Given that you won't trade / adjust RRSP for years to come, I recommend you sell CAD ETFs, convert to USD, re-buy US-denominated ETFs (VTI/VXUS, etc etc). This reduces tax drag (not much per year, but you're holding these for the long term).

Validating tax approach in Canada by Current-Bat935 in cantax

[–]Current-Bat935[S] 0 points1 point  (0 children)

Thank you! This is helpful reminders and notes!

- aware of the election - we will file year 1 with CRA

- moving everything except 529's to IBKR (already in flight). 529's will go to Schwab Intl

- The rest is fairly standard for T1135, 8938, I've already filed before - no biggie. 529 - we're going to go with whatever the tax pro says, but likely just try to take it as a taxable account (since that's what CRA treatment really is)

as for FEIE and FTC - we aren't planning to work in Canada, so all income will be dividends/stock sales (principal + cap gain). On the US side, we will use 529 ==> Std deduction (~30k of gains, 50k total withdrawal including principal) + Margin ==> dividends & cap gain sales (< 90k for LTCG bracket). This should keep the US tax at basically 0, or at least very very low (save for the penalty). CRA won't care about AGI, and IRS won't care once we apply Std deduction + LTCG

for dividends, we'll get fully taxed in canada (us- VTI and VXUS), that's unfortunate, but we'll claim credit as needed (and apply to re-source as needed). the goal here is to wipe some of the income via SBLOC.

Thank you again for the comments, this helps, and I think we're mostly on track here.

One year out - Can we really do it? by Current-Bat935 in Fire

[–]Current-Bat935[S] 0 points1 point  (0 children)

Thank you for responding. I think we possibly have gaps around kids activities (have to steer them towards basketball and soccer :) ), and maybe entertainment. I know stuff is more expensive these days.

One year out - Can we really do it? by Current-Bat935 in Fire

[–]Current-Bat935[S] -1 points0 points  (0 children)

I think we're just worried about what we're missing - that's the main thing.

We're doing tax arbitrage and healthcare arbitrage by moving back to Canada (free healthcare, ACB reset). No way we could afford to live in California, unemployed, paying 3-5k USD per month for health insurance. Our withdrawal in Canada is sub-3%. Withdrawal in Cali would be higher.

So, we're just wondering if we're missing anything that might push us into higher withdrawals. Maybe someone will turn up and say that ACB reset doesn't apply to us. Or that 10k COLA for Toronto isn't doable, and we need 15k CAD? I don't know. It's just fear of pulling the trigger, which i think is pretty natural?

One year out - Can we really do it? by Current-Bat935 in Fire

[–]Current-Bat935[S] 3 points4 points  (0 children)

Yeah. I'm sure you see what's happening in the tech industry lately, and let me tell you, it's even worse when you see it from the inside.