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Financial Planning / Tax Strategies


Subject:  Re: re:tax penalties Date:  11/2/2000  11:40 AM
Author:  JABoa Number:  41426 of 127753

If it's just sitting in a bank account, you won't have to do much of anything for the moment since the Canadian banks pay such scrawny interest. You will however have to check "Yes" on Line 7a of Schedule B. And report the interest credited to you. The Canadian government typically liberates 20% (I forget the number, maybe it's 15%) of your interest as withholding to them. I see this on my Nortel and Royal Bank dividends. You can get a credit against U.S. taxes for this by filling out enough extra forms.

As far as I know, there are no tax issues associated with merely transferring money from Canada to the U.S. You wouldn't want to bring it over the border in cash, because the U.S. Customs Service would become very interested in you, even if your motives were the purest. But you wouldn't do that. Wire transfers are easily arranged, or bank checks.

I happen to have a small account in Canada, because my relatives are there and it is convenient to have access to the Loonie. I can answer "No" on Line 7a since the value of the account is so small. But aside from that, I figure it's easiest just to do everything in the U.S. because I don't have to worry about currency fluctuations, and all my Canadian stocks are listed on the NYSE anyhow.
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