Canadian Investment Question

[warlord 73]

So I have a few accounts from ages ago when I used to work in Canada. My dad had been managing them and a few are these little accounts for some T-Bill things that come due every couple of years (maybe 5 years?). Anyway they're only for a few thousand dollars and he said it probably makes more sense to just transfer those to the US when they become due and just put them in my own bank (as they're not really doing anything in Canada). I have other investments there that I'll continue to keep.

So my question is, one is coming due this month. If I get the bank TD over there up in Canada to send me a check for $2,600, how do I declare that on my taxes and is it taxable? I thought you could bring over up to $10,000 tax free from out of the country, but not sure if that was actually the rule or if I just saw people assuming it was that?

I know nothing about taxes and I've always just filled out the 1040-EZ forms (or the new 1040 ones where you just enter your one W-2 and that's all)...

Thanks

Edited January 11, 2012 by warlord

[bigdog 376]

I am not an investment professional, just reinvest and don't pay taxes.

[Udella&Wiz 325]

Have you been reporting them on your US taxes all this time as investments? I report my RRSP (which is locked in) every year on some IRS form that I send to Michigan (can't think of the name right now)

[Tim/Mav 305]

If you are the USC then the investments IF CASHED OUT ARE TAXABLE. The myth about $10.000,00 is Fiction. If your are changing one investment to another into a retirement account it is not taxable YET. It will get taxed eventually.

The reason I use the word USC is a SSN is assigned to the account and your name as well.

A qualifying account would be a Roth/IRA. Talk to a banker about this and is free of charge. Or cash the check and claim it on taxes. If you need the money, cash it out, if you don't the money could be used as retirement vehicle.

Just my thought. Its been 25 years and rules change.

[Tim/Mav 305]

Have you been reporting them on your US taxes all this time as investments? I report my RRSP (which is locked in) every year on some IRS form that I send to Michigan (can't think of the name right now)

As I recall. A T-Bill does not require annual tax. When cashed out is when they are reportable.

[Flames9_RN 358]

Have you been reporting them on your US taxes all this time as investments? I report my RRSP (which is locked in) every year on some IRS form that I send to Michigan (can't think of the name right now)

For RRSPS its form 8891

http://forums.serbinski.com/viewforum.php?f=2 usa/Canada tax forum

[aaron2020 11,651]

So I have a few accounts from ages ago when I used to work in Canada. My dad had been managing them and a few are these little accounts for some T-Bill things that come due every couple of years (maybe 5 years?). Anyway they're only for a few thousand dollars and he said it probably makes more sense to just transfer those to the US when they become due and just put them in my own bank (as they're not really doing anything in Canada). I have other investments there that I'll continue to keep.

So my question is, one is coming due this month. If I get the bank TD over there up in Canada to send me a check for $2,600, how do I declare that on my taxes and is it taxable? I thought you could bring over up to $10,000 tax free from out of the country, but not sure if that was actually the rule or if I just saw people assuming it was that?

I know nothing about taxes and I've always just filled out the 1040-EZ forms (or the new 1040 ones where you just enter your one W-2 and that's all)...

Thanks

You cannot use form 1040EZ to report the investment income. You will need to file a regular 1040 and list the profits from the investment as foreign income.

US citizens and LPRs are taxed on their worldwide income by the US government. It doesn't matter if the money remains in Canada or comes to the US. Once the investment is sold or pays out a dividend or interest, the US citizen or LPR must report it as income. Transporting the money into the US is not a tax issue - it is a money transporting issue.

There is no $10,000 exemption for investment earnings. You are confusing two rules - US taxes on earnings vs. transporting money across the US border. A person bringing over $10,000 must declare it at the POE into the US. This has nothing to do with earnings. It has to do with transporting money.

[Colleens 40]

You will get a form (NR-1 I think...it is similar to a T-4 but reports your investment income) from your investment company. I know when I left Canada I had to update all of my accounts and since I am not a US resident I am subject to a 25% withholding tax to the Canadian Govt. The amount of your investment and the amount of tax paid will be reflected on that NR-1statement. You will claim the income as foregin income and the tax you paid as a tax credit. This is the way H&R block handled my investments that I cashed in last year.

[warlord 73]

Thanks, it's all just been sitting in a few accounts over there and none have actually made any money (in fact they have lost a lot in that past good number of years. In fact it's about the exact same as when they were started back in 1995. Here I have the 401k, 457k and Roth IRA, but I am not familiar with the Canadian ones. My dad just handed me over all the information a year or so ago and thought it would be best for me to start taking care of it just in case something happened to him. So I'm totally lost with the whole thing.

So I will have to find out exactly what is coming due, I thought it was T-Bill, but I want to make 100% sure. If so what taxes would I be facing?

[Flames9_RN 358]

Thanks, it's all just been sitting in a few accounts over there and none have actually made any money (in fact they have lost a lot in that past good number of years. In fact it's about the exact same as when they were started back in 1995. Here I have the 401k, 457k and Roth IRA, but I am not familiar with the Canadian ones. My dad just handed me over all the information a year or so ago and thought it would be best for me to start taking care of it just in case something happened to him. So I'm totally lost with the whole thing.

So I will have to find out exactly what is coming due, I thought it was T-Bill, but I want to make 100% sure. If so what taxes would I be facing?

the guy on that tax forum can be a bit crusty--Agnelson,lol but he answers those questions all the time.

[warlord 73]

the guy on that tax forum can be a bit crusty--Agnelson,lol but he answers those questions all the time.

Yeah I got some answers from that site so cool. Turns out it's a guy I've known on the boards since the 90's so kind of funny he's on that one too.

Basically the T-Bill this is self explanatory, I just report that when it matures and I get the money here.

The RRSP I guess I need to do the 8891 for the past few years I've been a citizen (thank hell I have my time line here as I can't remember how long ago that was). The 8891 is confusing to me since I have no idea what a beneficiary is compared to an Annuitant since I'm not getting paid out any money nor contributing to it. And with that, I have no idea what all these capitol gains, dividends and ####### is either.

I just know the RRSP just sits there year after year and the last contribution I did was in 1997.