This article outlines financial planning concerns for Canadian buyers who want to take advantage of real estate opportunities in the United States for either financial or lifestyle choices. Author John McCord highlights complex issues such as estate, insurance, financing, residency, immigration and taxation that are important considerations in the purchase of property in the U.S. In addition to potential tax advantages, a unique real estate investment opportunity through the EB-5 visa program also offers the possibility of a streamlined Green Card approval process. To understand the merits and the pitfalls, McCord recommends consulting with a qualified team of professionals who specialize in Canadian and United States cross-border transitioning and asset management in order to develop the best individualized strategy.
Canada-U.S. Financial Planning Articles
Cross-Border Planning Full of Conflict
This article from Advisor.ca discusses the complexities of financial planning for Americans and Canadians whose lives, assets and interests cross two borders. Cardinal Point’s James Sheldon points out that those in a dual-citizenship marriage or with cross-border assets need financial advice, investment planning, and wealth and estate planning that meet securities regulations in both the U.S. and Canada. Multiple tax jurisdictions need a more sophisticated level of advice, and one of the primary challenges of cross-border financial planning is navigating the big three: the U.S. Internal Revenue Service (IRS), the Canada Revenue Agency (CRA) and the Canada/U.S. Tax Treaty. Given the lack of continuity in how the three deal with assets, there is the potential for double taxation. The article also looks at what to consider in preparing for the Canadian departure tax and what to do with a will or tax-free savings account before making a move.
Cross-Border Financial Advisors Are in Demand
This article emphasizes the need to review financial planning and investment matters with a team well-versed in cross-border issues prior to any move, as a lack of proper planning can often result in higher taxation, poor estate planning and enhanced risk. It can be hard to identify an advisor who is qualified to offer financial advice on both sides of the border. The best strategy is to employ an advisory team that has the ability, platform and knowledge to manage assets in Canada and the U.S. under one cohesive strategy. A successful strategy requires in-depth knowledge of Canadian and U.S. tax systems and collaboration between cross-border financial advisor professionals (financial advisors, CPAs, attorneys, etc.).
Part 4: Preparing to Exit the United States for Canada?
In part four of the series, John McCord examines how to adjust one’s risk management strategy when moving from the U.S. to Canada. Important considerations in this financial planning scenario include insurance and healthcare. The article discusses the mechanics, availability and restrictions of the Canadian healthcare system. It also looks at important questions to ask if one returns to Canada when holding U.S.-based life, disability and long-term care insurance policies.
Part 3: Preparing to Exit the United States for Canada?
In the third series installment, Cardinal Point’s John McCord looks at how the differing tax systems of the U.S. and Canada can lead to the risk of “double taxation” for expatriates when both countries tax the same income for the same tax year. The Canada U.S. tax treaty helps mitigate this risk as does the exchange of citizen and resident tax information between the two countries. Established in 1980, the treaty asserts that residency—not citizenship—is the most important factor. The article also discusses tax credits and tax-withholding guidelines set forth in the treaty.
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