Dual Citizen (US/CAD) - Investing

Asset allocation, risk, diversification and rebalancing. Pros/cons of hiring a financial advisor. Seeking advice on your portfolio?
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dxht
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Dual Citizen (US/CAD) - Investing

Post by dxht » 20 Jun 2017 22:19

Hi there, I am a new investor and would like advice on starting my investments! I am a dual citizen and reside in Canada. I am 25 and have been in Canada since I was about 3 years old. I just filed my US taxes for the first time and am unsure of what will happen. I however have just come across that as a dual citizen, I should not be having a Tax Free Savings Account. So, I intend to pull out all of my money in my TFSAs and start over. I believe that RRSPs are exempted and that I could invest in that. Otherwise, I was hoping to look for other methods of investing since I am unable to put my money in TFSAs.

I have approximately $15,000 to invest.
I take home approximately $3,000 a month.

Thank you!

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cannew
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Re: Dual Citizen (US/CAD) - Investing

Post by cannew » 24 Jun 2017 09:15

Bad situation. Here's an article on the subject: http://www.cbc.ca/news/business/taxes/t ... -1.3446226

Wonder if funds are with drawn form RRSP if they must also be claimed as US income? Found another article on rrsp:
https://serbinski.com/working-in-usa/rrsp

After reading the two articles, the question is why maintain Dual Citizen? Do you plan to move to the US or are you planning to remain in Canada? Our kids had Dual as we adopted them in the US. After we moved back to Canada and years later one moved to the states, the other stayed here but gave up US.

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Re: Dual Citizen (US/CAD) - Investing

Post by Quebec » 24 Jun 2017 09:52

Welcome to the forum.

I don't know anything about the dual citizenship/taxation issues, others will have to help you with that.

But regardless of which type of account the money is invested in (RRSP, TFSA, non-registered), the general principles of long-term investing (e.g., for retirement) are the same. See finiki: Getting started. If viewing this with a computer, also look at the articles in the ''Getting started'' menu at the right side of the screen in the linked article.

It is advisable to learn about general investing and financial planning principles before starting to look at specific accounts and products. Of course few of us actually did this, we learned from our mistakes, etc.

Good luck!
Imagefiniki, the Canadian financial wiki: a knowledge base of financial subjects written from a Canadian perspective

dxht
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Re: Dual Citizen (US/CAD) - Investing

Post by dxht » 24 Jun 2017 13:25

cannew wrote:
24 Jun 2017 09:15
Bad situation. Here's an article on the subject: http://www.cbc.ca/news/business/taxes/t ... -1.3446226

Wonder if funds are with drawn form RRSP if they must also be claimed as US income? Found another article on rrsp:
https://serbinski.com/working-in-usa/rrsp

After reading the two articles, the question is why maintain Dual Citizen? Do you plan to move to the US or are you planning to remain in Canada? Our kids had Dual as we adopted them in the US. After we moved back to Canada and years later one moved to the states, the other stayed here but gave up US.
I am keeping my US citizenship because I am unsure if I will end up retiring in the US in the future. I think that for RRSP, the income will be tax free until the day I withdraw them.

dxht
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Re: Dual Citizen (US/CAD) - Investing

Post by dxht » 24 Jun 2017 13:26

Quebec wrote:
24 Jun 2017 09:52
Welcome to the forum.

I don't know anything about the dual citizenship/taxation issues, others will have to help you with that.

But regardless of which type of account the money is invested in (RRSP, TFSA, non-registered), the general principles of long-term investing (e.g., for retirement) are the same. See finiki: Getting started. If viewing this with a computer, also look at the articles in the ''Getting started'' menu at the right side of the screen in the linked article.

It is advisable to learn about general investing and financial planning principles before starting to look at specific accounts and products. Of course few of us actually did this, we learned from our mistakes, etc.

Good luck!
Thank you, I will go and take a look at the general investing principles!

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Re: Dual Citizen (US/CAD) - Investing

Post by DanH » 27 Jun 2017 16:14

It's always a good idea to get advice from a tax expert versed in cross border taxation. Generally, it's likely a good idea for dual citizens (or any U.S. citizen) to avoid investing in investment funds that are domiciled or resident in Canada (i.e. mutual funds, exchange traded funds, pooled funds, limited partnerships, and other pooled investment vehicles classified as Passive Foreign Investment Corporations by the IRS).

This may impose a practical limit on your investment options to thinks like individual stocks, individual bonds and ETFs that are domiciled in the U.S. But that should still leave you with plenty of options.

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Re: Dual Citizen (US/CAD) - Investing

Post by dxht » 27 Jun 2017 20:34

My current plan is to transfer over my TFSA money to an RRSP... Would I then be able to buy Canadian mutual funds within my RRSP?

Thank you!

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Re: Dual Citizen (US/CAD) - Investing

Post by DanH » 27 Jun 2017 21:12

I believe U.S. citizens investing in PFICs inside of a RRSP is safe from an IRS tax liability/reporting perspective. But you should double check that with someone more qualified than me.

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