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The First Canadian in the White House?

August 27, 2013 By Cardinal Point Wealth

Our very own, Terry Ritchie, recently wrote an article for the website, Advisor.CA. He touches on the latest news surrounding Ted Cruz. Cruz, a U.S. senator, has decided to renounce his dual Canadian citizenship to prevent confusion regarding his political loyalties, experts suspect, because the Republican Party has shortlisted him as a candidate for the presidential election in 2016. Ted Cruz, a U.S. senator from Texas, may be attempting to avoid the same election complications that plagued President Barack Obama when his citizenship came under fire prior to becoming the 44th U.S. president due to living abroad during his childhood and having a father from Africa. Cruz was born in Calgary and his American mother and naturalized American father relocated to the U.S. when he was four years old.

Technically Cruz is both a Canadian and American citizen, and according to the U.S. Constitution is eligible to run for president, but when a candidate’s birth origin is ambiguous, a phenomenon called “birtherism” sometimes develops that involves political opponents publicly disparaging and questioning a politician’s patriotism.

The tax and financial implications are minimal but could have been serious had Cruz lived in and reported income taxes to Canada as a dual U.S. citizen. The U.S. Internal Revenue Service requires all American citizens, regardless of residence to report income taxes as U.S. income. Conversely, Canada collects income taxes from only those Canadians living within the country’s border. The American law has become more enforced since the Foreign Account Tax Compliance Act was implemented in 2010, compelling many ex-patriot Americans to renounce U.S. citizenship to avoid paying higher taxes.

In a single fiscal quarter, according to the U.S. Treasury Department, 1,130 Americans renounced American citizenship, whose names are recorded in the Federal Register. The public record can be viewed by anyone, and accounting professionals can search for their clientele.

In a statement by Cruz, he claimed to have no awareness of his dual citizenship and said, “I have never taken affirmative steps to claim Canadian citizenship, I assumed that was the end of the matter… Nothing against Canada, but I’m an American by birth and as a US senator, I believe I should be only an American,” Cruz said.

There has been no confirmation that Cruz will indeed run for presidential election, but as a Hispanic former presidential legal adviser and Tea Party backed policy maker, some experts consider him a strong contender and his inner circle of advisors have indicated a bid.

Filed Under: Articles, Cross-border Tax Planning, FATCA, Immigration Tagged With: Cross-border tax planning, FATCA, Immigration, Renouncing Citizenship

 
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“Cardinal Point” is the brand under which dedicated professionals within Cardinal Point Capital Management, ULC provide financial, tax and investment advisory, risk management, financial planning and tax services to selected clients. Cardinal Point Capital Management, ULC is a US registered investment advisor and a registered portfolio manager in Canada (ON, QC, MB, SK, NS, NB, AB, BC). Advisory services are only offered to clients or prospective clients where Cardinal Point and its representatives are properly registered or exempt from registration. This website is solely for informational purposes. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital.