U.S. Tax Tips
If you, like many U.S. expats (U.S. citizens and Green card holders living outside the United States) are becoming more frustrated, confused, or overwhelmed with the massive burden that U.S. citizenship may entail when you are living outside the United States, you may have considered renouncing your U.S. citizenship.
An Individual Taxpayer Identification Number or ITIN, is a tax processing number issued by the Internal Revenue Service (IRS) which is designed for foreign individuals (non US-persons) who are required to file a US federal tax return, or have other IRS filing requirements, but are not eligible for a Social Security Number (SSN).
IRS Form 3520 A is often filed by Canadian tax advisors with respect to Tax Free Savings Accounts (TFSAs) that are held by U.S. person. However, the tax treatment of TFSAs for U.S. federal income tax purpose is uncertain because there is there is no case law and no clear guidance by the IRS.
Owning U.S. real estate can result in significant benefits for Canadians and can open up a primary or secondary source of income. However, it is important to understand the complexities involved in purchasing and owning U.S. real estate for Canadian individuals and businesses.
To the disappointment of many the Tax Cuts and Jobs Act did not repeal the u.s. estate tax. What it did do is double the base exclusion amount for 2018. The basic solution amount will be eleven point two million dollars per person and twenty two point four million dollars per married couple. This is applicable for U.S. domiciliaries as well as Canadians with U.S. situs assets. The Canada U.S. income tax treaty provides for a prorated unified tax credit for Canadians. Canadians who have worldwide assets under the threshold amount will not be required to pay U.S. estate tax they will however be required to file U.S. estate tax return or U.S. gift tax return. This provision provides tax planning opportunities these need to be taken advantage of before the provision sunsets in 2025.