Monthly Archives: April 2015

And Homelanders wonder why #Americansabroad are renouncing US citizenship


The above tweet references a comment at the blog that is worth turning into a post. And they wonder why people renounce U.S. citizenship!

Continue reading

Real estate tax: One million American citizens in Canada face double tax troubles

For Americans abroad, your home will never be your retirement plan.

Financial Post

Owning real property on both sides of the border can create a confusing tax situation.

Consider this example. Stefan and Jane are married and live in Vancouver. Jane is a Canadian citizen while Stefan holds both U.S. and Canadian citizenship. In 1994, shortly after getting married, they bought a house for $250,000 (all figures in U.S. dollars for simplicity’s sake), which they own jointly.

Thanks to the Vancouver housing market, the house is worth $2.25 million. Their increased net worth prompted Jane to buy a condo, in her own name, in Arizona, next to Stefan’s favourite golf course.

[related_links /]

Now Stefan and Jane might owe some U.S. tax if they want to sell the house or the condo. Under Canadian tax rules, the sale of their principal residence – their house – is free of capital gains tax (the tax due when an asset you own has appreciated in…

View original post 432 more words

American citizens in Canada can’t even escape U.S. taxes in death

How does the Canada U.S. tax treaty assist with preventing double taxation on death?

Financial Post

One million American citizens in Canada face double tax troubles. Max Reed explores these challenges in a spring series.

Benjamin Franklin famously said that nothing in life is certain except death and taxes. One wonders then what Mr. Franklin would say about taxes due on death?

For U.S. citizens living in Canada, it would seem that Ben Franklin was doubly right.

Consider Rajit, an elderly single U.S. citizen who lives in Montreal. His estate is made up of his principal residence worth US$2 million, an RRIF worth US$2 million, and a Canadian stock portfolio worth US$2 million. When he dies his US$6 million estate will be subject to a Canadian deemed disposition and the U.S. estate tax.

The U.S. estate tax is imposed on U.S. citizens in Canada. The total value of Rajit’s estate will be used to calculate his estate tax liability. There is a lifetime US$5.43 million (the…

View original post 412 more words

Many U.S. citizens in Canada are heading for the exits — but it could cost them

This article is good news and bad news.

Good news – It advertises the fact that an “Exit Tax” exists.

Bad news – It doesn’t even begin to describe how punitive and confiscatory the exit tax is.

Financial Post

One million American citizens in Canada face double tax troubles. Max Reed explores these challenges in a spring series

Many U.S. citizens in Canada have been lining up at the consulate to shed their citizenship because of their American tax plight. You might be staring at the tax paperwork for two countries and the expense involved and thinking, “me too.” Let’s see what’s involved.

In this example, John is a Canadian citizen who lives in Ottawa. Both his parents were American so John is a U.S. citizen too. He keeps reading in the paper that as a dual citizen he’s subject to U.S. tax rules. Having lived in Canada all of his life, he’s annoyed that he has to file extra tax returns. So he marches down to the American Embassy, pays the current fee of $2,350 and takes the solemn Oath of Renunciation.

Before deciding to wave goodbye to the…

View original post 428 more words

Boris Johnson: So you want to be mayor of London, Michael Bloomberg? That would be a step up

This would be interesting – Michael Bloomberg – attempting to be a “U.S. tax compliant” American citizen abroad. (Maybe he can avoid moving to London.)