Transfer of mutual funds

[Frenchy 0]

Sometimes it feels like I am the first Canadian to move to the States! Everywhere I try to find answers on how to best transfer my assets I end up either with different answers or institutions telling me they cannot guide me in this aspect!

I've set-up a Vanguard fund. Now I would like to transfer my Canadian mutual funds to this account. I have 2 options. Either I do a direct transfer from one account to the other. Or, I can have my Canadian bank write me a check for the full amount of my assets and then make a deposit here in the States.

Which is best? I am afraid of unknown penalties or hidden tax fees for such a transaction since this is not income and would not want to be taxed as such. Can anybody shed some light to this situation?

Thanks!

[JillA 2]

I use Custom House to transfer my money... I am waiting for the exchange to get better to transfer my pension money as it's a larger amount. CH is free and safe!

[Flames9_RN 358]

99% of the time depositing a Cdn cheque into a US bank account is a complete nightmare!! Numerous posts about us Cdns depositing a Cdn check into a USA acount and having nothing but head aches! Most banks wil give u a sub-par exchange rate, some wil charge a fee, etc etc! many of us have uswed customhouse.com---a Cdn company with HQ in Victoria. It has just recently been bought by Western Union, but havent noticed any changes! It does take a bit to set up--but it is very easy to do so. The staff are great and are more than happy to walk u thru the process. If you do it electronically (EFT) it is FREE!!! Highly recommend them, used them since 2005 and have never had a bad experience!~

[Udella&Wiz 325]

If you withdraw it from the Mutual fund in Canada and take it as $$$ to despoit down here - you suspect will be taxed on it by the Cdn side.

If you were rolling it over from 1 Cdn Mut fund to another- you might not be taxed. For example I rolled my group pension fund into an individual one before I left and I didn't pay tax...it was a seemless transfer.

I do not think you can avoid taxes if you withdraw up there and intend on starting a fund here (sorry not entirely sure what a Vanguard fund is). It's the Cdn gov't who'll want to tax you on the withdrawl- esp. if it was deposited pre-tax. They don't care what your intention is...they want to ensure they get their piece

Flames - what's that tax site...Serbinsky ..something...

Edited August 13, 2009 by Udella&Wiz

[trailmix 77]

Sometimes it feels like I am the first Canadian to move to the States! Everywhere I try to find answers on how to best transfer my assets I end up either with different answers or institutions telling me they cannot guide me in this aspect!

I've set-up a Vanguard fund. Now I would like to transfer my Canadian mutual funds to this account. I have 2 options. Either I do a direct transfer from one account to the other. Or, I can have my Canadian bank write me a check for the full amount of my assets and then make a deposit here in the States.

Which is best? I am afraid of unknown penalties or hidden tax fees for such a transaction since this is not income and would not want to be taxed as such. Can anybody shed some light to this situation?

Thanks!

You are right to be concerned about tax implications - seems to me it would be counted as income in Canada - but that all depends on what kind of mutual funds they are - what kind of account is it.

[Udella&Wiz 325]

Agree with T-mix- had another thought as well. Where will you live when you withdraw it...Canada likely so it would be included in your Cdn income for that year.

[CanAmCharlotte 0]

Not sure if your mutual funds are held in an RRSP but that's what I will assume.

If you have a financial advisor I would ask them to look into it. Because they are probably normally dealing with Canadian funds that stay in Canada, they might have to do some legwork. The financial advisor I had used for years was useless when it came to this and I had to seek assistance elsewhere. I had an RRSP portfolio made up of strip bonds, stocks, and (mostly) mutual funds. I didn't want to take out that money when I moved to the US and incur heavy taxes. I wanted it to accrue tax-free until retirement age. In the end, the only way for me to handle it was to convert all of my portfolio to segregated funds (bascially mutual funds held by an insurance company). I can't make any additional contributions to my portfolio and the money stays in Canada until retirement age. At that time I will set up a RIF and draw a monthly cheque. I will have to pay Canadian taxes when that starts to happen (oh joy). Believe me, they're going to get you one way or another. Alas, there is no free ride.

Another thing that Canadians living in the US who hold money in Canada should know is that there are two forms to fill out annually. One form (TD F 90-22.1) goes to the Treasury Dept. in Detroit and the other (Form 8891) is attached to your income tax return. An American CPA can help you with that if you don't feel comfortable doing it yourself. Basically you're just declaring what monies you hold outside of the country and there are no tax implications. There are pretty stiff fines if you don't do this and the IRS finds out. The forms are no big deal and can be filled out in about a minute.

Edited August 13, 2009 by CanAmCharlotte

[Udella&Wiz 325]

Not sure if your mutual funds are held in an RRSP but that's what I will assume.

If you have a financial advisor I would ask them to look into it. Because they are probably normally dealing with Canadian funds that stay in Canada, they might have to do some legwork. The financial advisor I had used for years was useless when it came to this and I had to seek assistance elsewhere. I had an RRSP portfolio made up of strip bonds, stocks, and (mostly) mutual funds. I didn't want to take out that money when I moved to the US and incur heavy taxes. I wanted it to accrue tax-free until retirement age. In the end, the only way for me to handle it was to convert all of my portfolio to segregated funds (bascially mutual funds held by an insurance company). I can't make any additional contributions to my portfolio and the money stays in Canada until retirement age. At that time I will set up a RIF and draw a monthly cheque. I will have to pay Canadian taxes when that starts to happen (oh joy). Believe me, they're going to get you one way or another. Alas, there is no free ride.

Another thing that Canadians living in the US who hold money in Canada should know is that there are two forms to fill out annually. One form (TD F 90-22.1) goes to the Treasury Dept. in Detroit and the other (Form 8891) is attached to your income tax return. An American CPA can help you with that if you don't feel comfortable doing it yourself. Basically you're just declaring what monies you hold outside of the country and there are no tax implications. There are pretty stiff fines if you don't do this and the IRS finds out. The forms are no big deal and can be filled out in about a minute.

Good points - I had to start those forms. I am half tempted to try withdrawing my $$$ and rbing it down here, but I can't stomach the taxes

[Flames9_RN 358]

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