Canadian citizen, US PR

Hi,

Here is my situation:

I am a Canadian citizen and I recently qualified for Diversity Visa, went to the interview and got the immigrant visa.

I am currently working part time in Canada/Europe as consultant, have my own company incorporated in Canada and pay my taxes there.

I intend to go to US, get the green card, open a bank account and apply for SSN, but I do not anticipate moving there in the near future (1-2 years). I am going to apply for the return resident status until I decide to move there.

My question is - what should I tell the officers at the border when I come back to Canada, should I show them my Canadian passport or should I tell them I am US resident and I don't live in US?

Also should I file taxes in both US and Canada, even if I will not live in the states in the near future?

Any suggestions are greatly appreciated.

George

I am a Canadian citizen and I recently qualified for Diversity Visa, went to the interview and got the immigrant visa.

Hmmm...It's my understanding that Canada has always been ineligible for the DV lottery. How did you become eligible? Correct me if I'm wrong.

My question is - what should I tell the officers at the border when I come back to Canada, should I show them my Canadian passport or should I tell them I am US resident and I don't live in US?

If you are a Canadian citizen, I would imagine you show them your Canadian passport. I don't think it would make sense you tell them you're a U.S. resident when you don't physically live there. That would be lying and I'm sure they could find out if they wanted.

Also should I file taxes in both US and Canada, even if I will not live in the states in the near future?

You would file taxes only in Canada. Until you're physically working in the U.S., you would then file taxes there.

I have dual citizenship and I qualify based on the other citizenship.

Hmmm...It's my understanding that Canada has always been ineligible for the DV lottery. How did you become eligible? Correct me if I'm wrong.

Exactly what I would expect. Here is another question: if I come back to Canada and stay for 7-8 months, how are they going to know how much I lived in Canada? Do they make a note or something in the passport when you come back to Canada?

If you are a Canadian citizen, I would imagine you show them your Canadian passport. I don't think it would make sense you tell them you're a U.S. resident when you don't physically live there. That would be lying and I'm sure they could find out if they wanted.

Make sure that before you leave the US you have applied for and received your re-entry permit, especially if you intend to be gone from the US for 6 months or more. Just because you will then have a green card, doesn't mean they can't or won't also take it away from you if they deem you have no intent to settle in the US.

How will who know how much you live in Canada? I'm assuming you're asking for tax purposes, correct? It's basically an honour system, plus they can track how much you've worked in Canada for the year, and determine by that how many months you've been resident. Plus, if you retain a driver's license, bank accounts, RRSPs, property etc etc etc, these are all residential ties according to RevCan, and they can determine your reisdency for tax purposes.

I am asking for establishing the PR status in US. I am concerned I might lose the green card. You need to stay more than 6 months per year in US and I was wondering if they know how long I stayed in Canada, especially if I travel back with my Canadian passport. Or they need to see the exit visa and in this case I would need to show my immigrant forms at the border. I telecommute and it is easy for me to work from both places.

How will who know how much you live in Canada? I'm assuming you're asking for tax purposes, correct? It's basically an honour system, plus they can track how much you've worked in Canada for the year, and determine by that how many months you've been resident. Plus, if you retain a driver's license, bank accounts, RRSPs, property etc etc etc, these are all residential ties according to RevCan, and they can determine your reisdency for tax purposes.

Once you leave the U.S. going into Canada, they will know exactly when you left and how long you've been out. Are you planning to commute through a border town? If so, you could maintain a residence in the U.S. and telecommute to Canada that way.

Like the previous post, you should apply for your re-entry permit to avoid difficulties when attempting to enter the U.S. This is providing you plan on staying out of the U.S. consistently for 6 months.

yes, I cross the border by car. but I don't plan to commute to US often. I work from home. I plan to get the green card, then return to canada by car (1 hour drive). Then I won't go back for another 12 months...

Once you leave the U.S. going into Canada, they will know exactly when you left and how long you've been out. Are you planning to commute through a border town? If so, you could maintain a residence in the U.S. and telecommute to Canada that way.

Which is why I mentioned applying for the re-entry permit after you get the green card, but before you leave the US.

See the USCIS website for forms and information.

I intend to go to US, get the green card, open a bank account and apply for SSN, but I do not anticipate moving there in the near future (1-2 years). I am going to apply for the return resident status until I decide to move there.

It's not realistic to do this, if you spend more than a year outside of the US your LPR status becomes invalid, I've actually sat in secondary inspection and watched people get denied entry on that basis.

My question is - what should I tell the officers at the border when I come back to Canada, should I show them my Canadian passport or should I tell them I am US resident and I don't live in US?

Just show them your Canadian passport, it doesn't matter where you live except for customs duty purposes.

Also should I file taxes in both US and Canada, even if I will not live in the states in the near future?

Under caselaw in the US, the date at which you claim permanent residence in the US is the date on which your tax home moves to the US. In the CBP manual it specifically mentions that inspecting officers should ask returning LPRs if they file IRS form 2555 (to say you live outside the US), if you answer yes, that will cause you problems.

So basically on the date you enter the US with your visa, all of your income from any source becomes subject to US taxes, and any assets you have become subject to US capital gains tax if you dispose of them, etc. And from that point you must file a 1040 every year as a resident of the US (dual-status in the first year).

I don't know what your Canadian company is, I assume if you are resident in a European country you can't be using a CCPC, but if you are using a CCPC, Canadian law requires the controlling shareholders to be resident in Canada for tax purposes. So on the date you move to the US if you have a CCPC and you are the controlling shareholder, it ceases to be a CCPC and becomes subject to the full corporate income tax rate in Canada. If you fail to notify the CRA of this fact, then they will deem you resident in Canada for tax purposes (as a CCPC is a residential tie) and you will end up getting taxed twice (by the US and Canada).

In addition, if you started your CCPC from zero and it's worth more than that now, you will have to pay departure tax on it. This assumes you are resident in Canada currently for tax purposes. http://www.cra-arc.gc.ca/tx/nnrsdnts/nd ... n-eng.html

If you moved your tax home to a European country you should already have done this.

To cut a long story short, if you're moving to the US, you're moving to the US. You can't pretend to live there as an LPR and live somewhere else. US law and Canadian tax law make it basically impossible to do it any other way.

A declaration of permanent residence in the US is exactly that under US law.