Hi Mohammad, I got settled in Canada for the past five years. Recently, I decided to move to the USA and wanted to know about the different legalities involved while moving with Canadian investments.
If you use these for personal use, no yearly CRA tax filing obligations on Canadian real estate investments and rental property. Non-residents holding Canadian rental property must remit 25% withholding tax from the rent and file with CRA on a yearly basis.
When it comes to selling, you got to deal with some notifications.
For Canadian Mutual Funds in Non-Registered accounts, non-residents are prohibited from buying mutual funds, real estate investment trusts, and EFTs, but you can hold onto existing ones.
If you are holding a mutual fund, you fall under the Passive Foreign Investment Corporation tax reporting in the U.S., which comes with a lot of punitive tax filings and higher tax rates.
For a TFSA, a Tax-Free Savings Account, it depends on your Canadian tax residency.
Once you leave Canada you can no longer contribute to the TFSA, but the account itself remains intact. This tax-free status is not applicable for the U.S. income tax, and all income earned even if not contributed will be taxable by the IRS.
For a Registered Retirement Savings Plan, the US equivalent is an IRA, but transferring to an IRA is highly discouraged. You have three options: withdrawal, converting to RRIF for distribution, or leaving it alone.
Sound complicated? It is! Make sure you consult a trusted CPA before approaching any decision. It involves the risk of your money.