Short Blog Posts In One Location…
◊ U.S. Tax withholding for Canadians
Make sure you have the correct amount withheld from US income received. Generally amounts withheld in excess of treaty rates will not be creditable in Canada. In order to get the a refund from the IRS, you will need to file a U.S. 1040NR return and apply for an ITIN (individual taxpayer identification number) with the ITIN office.
Waiver forms such as the W8BEN should be submitted to the payor prior to the anticipated receipt of any US income to ensure the lower treaty rate (which could be 0%, 5%, 10% or 15%) in lieu of the US IRS code withholding rate of 30%. Interest, dividends, royalties, pension are usually the types of income that are overlooked.
◊ Estate Planning for U.S. Expatriates
As U.S. persons residing in Canada are subject to the federal U.S. estate rules, the provisions become more complicated when one spouse is not a U.S. person. The IRS code and regulations need to be examined in conjunction with Article XXIX-B of the Canada/U.S. Tax Treaty to determine the tax effective manner to transfer wealth.
◊ Post-mortem Pipeline
In a ruling, the CRA confirmed that a series of transactions designed to monetize the cost base created by the deemed disposition of shares on death were not offensive. The ruling summarized the factors the CRA considers in determining whether to apply the various anti-avoidance provisions that could be relevant.
◊ Principal Residence – Deceased Estate
The deceased had left his principal residence to a trust, providing that it could be occupied by his surviving spouse. She vacated the property and the estate was to sell it. The CRA confirmed that the principal residence exemption was potentially available to the estate, and outlined the conditions governing the claim.
Original Post By: Larry Stolberg