Canadian Mutual Funds and PFICs: A Great Canadian Investment Can Become a U.S. Tax Nightmare
A Canadian mutual fund can be one of the simplest investments for a Canadian taxpayer but a complicated one for a Canadian resident who also happens to be U.S. person.
For U.S. citizens, Green Card holders, and certain Canadian residents required to file U.S. tax returns, these investments can create significant compliance challenges due to the U.S. rules governing Passive Foreign Investment Companies (PFICs).
Child Tax Credit for Americans Living Overseas: What Expats Need to Know
American taxpayers living outside the United States may still be eligible for the Child Tax Credit (CTC).
Corporations in Canada
The purpose of this article is to provide more information about the benefits that a corporation can provide, as well as identify some potential traps that individuals should be aware of before setting up a private corporation in Canada.
Section 962 Election: Taxing CFC Income Inclusions at Corporate Rates
In our previous blog on Section 956, we discussed how US individual shareholders of Controlled Foreign Corporations (CFCs) can be subject to additional income inclusions on top of the more commonly known Net CFC Tested Income (NCTI, formerly Global Intangible Low Taxed Income, GILTI) and Subpart F income regimes.
Net Investment Income Tax (NIIT): Planning Considerations for U.S. Citizens in Canada
The NIIT presents a distinct challenge for U.S. citizens living in Canada due to its limited interaction with foreign tax credits. While recent court cases offer potential relief, uncertainty remains. In the meantime, proactive planning and protective filings can help mitigate exposure and preserve future opportunities.
RRSP vs. 401(k)
For individuals moving between Canada and the United States, understanding the differences between RRSPs and 401(k)s is essential for effective retirement planning. While both accounts offer tax-deferred growth, they are governed by different rules under the CRA and IRS. The Canada-U.S. Tax Treaty plays a key role in preserving tax advantages across borders, making careful planning crucial during and after a cross-border move.