Canadian living in US, needing to Bank in Canada

I'm living in the US, and just rec'd an inheritance, in Cdn dollars. Given the weak Cdn dollar, I want to keep the money in Canada. I have an account with RBC that we kept when we moved to the US and I plan to leave the $$ there, and just transfer money to a US account as needed. I also was thinking of setting up some GICs and bonds. Can I do this? Are there any tax implications, or other issues that I should be aware of? An info would be appreciated.

What's your status in the US? Permanent resident, or temporary work visa? If your tax home is the US, you'll have to claim that money on your tax return, regardless of what bank you put it in.

Thanks for the info. I'm a permanent resident. I know I will have to claim it here in the US, but it is an inheritance so I believe it has already been taxed? I'm sure I will learn more as I work through this rather confusing issue.

You may want to talk to an actual tax accountant who knows the rules both sides of the border. The only firm I've ever heard of that does both Canada & US taxes, and for ex-pats in either country, is http://www.serbinski.com/ Serbinski.

I'm not endorsing them in any way, I've never used their services, and I've read mixed reviews. So, take it with a grain of salt and continue your research by all means. I believe there is a forum at that link you could possibly find some info. They're just the only firm I've ever seen posted anywhere that deals with Canadian ex-pats tax issues in the US.

Hi there!
I was in a similar situation and the money was taxed in Canada first. I live in Brazil so I didn't have to worry about tax here. i had a way of getting it with a very small charge and no extra taxes. In the US, if you file a return, I'm sure they will know you have money.
Andy

There are various tax implications, depends on where your tax home is. If you're an LPR then you have to move your tax home to the US.

So on your inheritance in Canada you (or rather the estate) will have to pay capital gains tax and the probate fee, I don't think you can claim a foreign tax credit in the US for that as there is no CGT on estates in the US. I'm pretty sure you can't, because estate tax in the US is basically nil at the moment so there's nothing to claim a credit against.

If you invest it in a GIC, the income from that is subject to income tax in the US and as a non-resident I think it is subject to Part XIII withholding, which I think is 10% in this situation. I'm not sure if you can claim a foreign tax credit in the US for that tax. You'd need to check with someone fairly high up at that bank on that one.

If you invest it in stocks or other things like that, distributions (such as dividends) are subject to income tax, disposals will be subject to capital gains tax. IIRC, that (CGT) works out to the US rate because you are a US resident, you have to pay the Canadian rate which is higher but you get it back by making a claim with the CRA that you are non-resident, but then you have to pay US CGT on it. However that rate at the moment for small gains is 0% (Obama wants to raise it).

But it can get complicated because you have to use a trader who is registered with the SEC who can do Canadian deals.

I have to say I think your logic is flawed unless you're planning on moving back to Canada at some point, the exchange rate was historically high for awhile, I doubt the Canadian dollar is going to go up again anytime soon, it's going to be going down for awhile. It may end up slightly higher than it is at the moment but I doubt you'll see parity again or anywhere near it. Not for many years at least.

But yeah, check with a Canadian accountant with cross-border experience because obviously there are various things you can invest in and the tax works in different ways depending on what the investment is. The wrinkle that American accountants won't understand is the Part XIII withholding as that is unique to Canada.

I'm living in the US, and just rec'd an inheritance, in Cdn dollars. Given the weak Cdn dollar, I want to keep the money in Canada. I have an account with RBC that we kept when we moved to the US and I plan to leave the $$ there, and just transfer money to a US account as needed. I also was thinking of setting up some GICs and bonds. Can I do this? Are there any tax implications, or other issues that I should be aware of? An info would be appreciated.

Thought I would let you know RBC has a branch in some states (not sure about yours), it is RBC Centura. It is very nice as you can transfer between the two banks and currencies on-line through one website. I found this out when I was living and working in FL and needed to bank between the US and Canada, they made it very easy to transfer funds between my Canadian and American bank accounts. It is also nice because it doesn't have ATM fees attached. This bank also helped me get a Credit Rating in the US using my Canadian Credit scores (no one else would give me a chance). Taxes is another story I am not an accountant so I can't help there.

I am both an attorney and a CPA who handles crossborder tax issues. Originally from Toronto, I now practice in California. Please feel free to contact me if you are still looking for guidance on this matter.