Moving Money from CANADA to USA

[Jenn&Matt 3]

4 minutes ago, Lil bear said:

No red flags. Just make sure it is correctly reported as required on your tax return and by FBAR every year that it remains over $10000USD at any time during the previous year   Foreign  asset holding is common place now and there are security agreements in place to ensure the source of holdings is traceable. 

I'm just reviewing the FBAR details now. So, there aren't any concerns of amounts over $10,000 being taxed if we transfer it into our U.S. Accounts? (I mean, this amount has already been taxed in Canada....)

[Lil bear 4,213]

1 hour ago, Jenn&Matt said:

I'm just reviewing the FBAR details now. So, there aren't any concerns of amounts over $10,000 being taxed if we transfer it into our U.S. Accounts? (I mean, this amount has already been taxed in Canada....)

If your accounts don’t get over 10000k at any time during a year you don’t have to do FBAR. but you must always report any interest income earned from foreign assets no matter how small the asset or interest. That’s what’s being taxed by the IRS 

If the transferred amounts ... no matter how large.. come from savings in CA they aren’t income here .. if the source is a pension, withdrawal from a superannuation account etc . that’s where the US potentially taxes it as income where other countries don’t. We cashed out everything before we left Australia .. before we triggered the LPR tax implications .. so what we were transferring from Australia to US was savings and hence not taxable income. 

[ADW & JOP 146]

1 hour ago, Jenn&Matt said:

Hi again! 

Just wondering your thoughts on whether there is any concern of having a large sum of money sitting in a Canadian banking institution after I move to the U.S.? I would like, like you @ADW & JOP, to exchange small amounts of currency at a time, which means I will have moved everything out of my TFSA and it will be sitting in my Savings account.

Do you think that would raise any flags? Or would there by any flags raised I bring money into my U.S. account (ie. concerns for these amounts being taxed??)

 

Sorry I have so many questions about this!

 

And @ADW & JOP, noticed your interview is coming up. GOOD LUCK!! 😃

No issues with having an account in a foreign country and as @Lil bear indicated, you will need to file an FBAR to include all your foreign accounts as long as your cumulative amount exceeds $10,000 USD. To simplify your tax situation, moving your money out of your TFSA makes a lot of sense as TFSA is taxable by the IRS once you become a tax resident in the US.

 

Here is a good read for you: https://www.investopedia.com/articles/personal-finance/091014/should-you-open-foreign-savings-account.asp

 

And thanks for your well wishes!

[Jenn&Matt 3]

Thank you @Lil bear and @ADW & JOP!

[CdnRN 40]

Wow! I hadn't realized this thread was still occasionally being posted. Has anyone ever researched "Norbert's Gambit" as a cross border money transfer method? https://www.moneysense.ca/columns/norberts-gambit-the-complete-guide/ of course did I find this when I needed to move larger amounts of money and was researching ways to move money? Of course not. 

 

 

 

 

[CAKIK 1]

Lots of people are recommending Transfer wise, but anyone used XE? On the surface, the exchange rate is slightly better than Transfer wise...

[Tofu 343]

8 hours ago, CAKIK said:

Lots of people are recommending Transfer wise, but anyone used XE? On the surface, the exchange rate is slightly better than Transfer wise...

I use XE. Love it. GREAT time to be moving CAD to US if you can. 

[CAKIK 1]

5 hours ago, Tofu said:

I use XE. Love it. GREAT time to be moving CAD to US if you can. 

Yeah! I am moving to US in 2 weeks and looking for the best way to move CAD to US. 

I am going to transfer the money to my husband's Chase account in US and set the reason "gift"

As long as we know that it won't be any impact to tax for gifting between spouses. 

Does anybody know if it is correct? 

[Sami50 0]

On 3/2/2020 at 12:38 PM, ADW & JOP said:

So I didn't use TD to convert as converting with a major bank can be pretty expensive. If you look at FXstreet for example, if you had $10000 CAD, the conversion in USD should be $7494. On TD's website, you get $7319. Of course, you may also get a better deal if you have a cross-border relationship with TD.

 

Depending on how much money you are planning to convert, there are different cost cutting methods you can consider.

 

Personally, I used a method called Norbert's Gambit with Questrade (https://www.moneysense.ca/magazine-archive/norberts-gambit-a-better-way-to-buy-u-s-dollars/). Using the same example now, based on the current numbers, you get closer to $7488 minus $60-70 in commission. Hypothetically, if you exchange say $100,000, the commission will be similar so the more you exchange, the better the conversion rate. The issue with this method is that it takes time to get used to it (I studied it for months before I started), you have to be aware of CRA superficial loss rules (in the case you are planning to make multiple exchanges), there is a delay and you will need to pay capital gain tax (particularly relevant in today's climate with the impact by the coronavirus) and Questrade (low fee brokerage) is not available to non-residents of Canada.

 

For a simpler method, you may consider something like TransferWise. From the above example, you will get $7438. What I would do in this case is to open a TD account, send it to TransferWise to convert, then send it back to a TD USD account, before wiring it to TD America. Personally, I have never used TransferWise before but from what I hear, they provide a decent service.

 

If you are planning to exchange a significant amount, and I would imagine you are if you are considering purchasing a condo, I would call and see what the exchange rate at TD, or any other major bank you plan to do business with, but also consider third-party options as well to see how you can get the best rate.

 

Just to provide you with my own personal experience. I have been with TD Canada for over 20 years. I created a USD account about 2 years ago and a TD America checking account about 1 year ago. Each of my accounts have enough money to meet the minimum balance to avoid any fees.

 

I then take money from my TD Canada account to Questrade to convert to USD and then have it transferred to my TD Canada USD account, then wire it to my TD America checking account. I find that this way, I drastically reduce my commission and wiring fees and saved approximately $3000-5000 in exchange fees.

 

By the way, the foreign exchange has been pretty bad for the CAD these days. When I made a big conversion in early January, I was getting 1 CAD for 0.77 USD. Unfortunately, the coronavirus has really impacted the CAD due to oil prices and impact on the global market. Last week, considering the current climate, I exchanged more at 1 CAD for .756 USD. Today, you are looking at 1 CAD to 0.7494 USD.

 

With the uncertainty of the coronavirus, global markets and the pipeline strikes, I project the CAD will continue to drop in the short-term but it's always hard to predict.

 

On 3/2/2020 at 12:38 PM, ADW & JOP said:

So I didn't use TD to convert as converting with a major bank can be pretty expensive. If you look at FXstreet for example, if you had $10000 CAD, the conversion in USD should be $7494. On TD's website, you get $7319. Of course, you may also get a better deal if you have a cross-border relationship with TD.

 

Depending on how much money you are planning to convert, there are different cost cutting methods you can consider.

 

Personally, I used a method called Norbert's Gambit with Questrade (https://www.moneysense.ca/magazine-archive/norberts-gambit-a-better-way-to-buy-u-s-dollars/). Using the same example now, based on the current numbers, you get closer to $7488 minus $60-70 in commission. Hypothetically, if you exchange say $100,000, the commission will be similar so the more you exchange, the better the conversion rate. The issue with this method is that it takes time to get used to it (I studied it for months before I started), you have to be aware of CRA superficial loss rules (in the case you are planning to make multiple exchanges), there is a delay and you will need to pay capital gain tax (particularly relevant in today's climate with the impact by the coronavirus) and Questrade (low fee brokerage) is not available to non-residents of Canada.

 

For a simpler method, you may consider something like TransferWise. From the above example, you will get $7438. What I would do in this case is to open a TD account, send it to TransferWise to convert, then send it back to a TD USD account, before wiring it to TD America. Personally, I have never used TransferWise before but from what I hear, they provide a decent service.

 

If you are planning to exchange a significant amount, and I would imagine you are if you are considering purchasing a condo, I would call and see what the exchange rate at TD, or any other major bank you plan to do business with, but also consider third-party options as well to see how you can get the best rate.

 

Just to provide you with my own personal experience. I have been with TD Canada for over 20 years. I created a USD account about 2 years ago and a TD America checking account about 1 year ago. Each of my accounts have enough money to meet the minimum balance to avoid any fees.

 

I then take money from my TD Canada account to Questrade to convert to USD and then have it transferred to my TD Canada USD account, then wire it to my TD America checking account. I find that this way, I drastically reduce my commission and wiring fees and saved approximately $3000-5000 in exchange fees.

 

By the way, the foreign exchange has been pretty bad for the CAD these days. When I made a big conversion in early January, I was getting 1 CAD for 0.77 USD. Unfortunately, the coronavirus has really impacted the CAD due to oil prices and impact on the global market. Last week, considering the current climate, I exchanged more at 1 CAD for .756 USD. Today, you are looking at 1 CAD to 0.7494 USD.

 

With the uncertainty of the coronavirus, global markets and the pipeline strikes, I project the CAD will continue to drop in the short-term but it's always hard to predict.

I am exactly in a same situation and based on my research I got to the same conclusion. Today I tried to open an account on Questrade but since I am non- residents don’t allow me complete my account . Wondering which type of account you open? Changed your USA residential address? I would appreciate your input.