Big thanks to the team at the Victoria chapter of democrats abroad for welcoming us to present for their members. The current U.S. administration recently rolled out new tax rules that will have a significant impact on tax and financial cross border planning and compliance requirements. If you have any questions about this presentation or any other cross border tax and financial planning issues please contact us at chris@beaconhillwm.ca or brent@hutcheson.ca

2. BRIDGING THE 49th
PARALLEL
TAX & INVESTMENT UPDATE
2018
Wednesday, January 10th
ROYAL VICTORIA YACHT CLUB
Brent England – Partner, Hutcheson & Co
Chris Stooksbury - Cross Border Financial Advisor, Beacon Hill-Raymond James

3. TAX FILING REQUIREMENTS FOR US CITIZENS IN CANADA
• DO I EVEN NEED TO FILE? (Hint…you do)
• CANADA FORMS (T1, T4, ect)
• US FORMS
• 1040
• Schedule B (Interest and Dividends, foreign accounts reporting)
• Schedule D (Capital Gains)
• Form 5471 (Private Corporations)
• Form 8261 (PFIC) Income
• 3520/3520A (Foreign Trusts)
• FBARS (foreign Accounts from 114)
• 8833 Treaty Disclosure
• Double Tax & Foreign Tax Credits Explained

4. THE NEW TAX
BILL AND
WHAT IT
MEANS FOR
THOSE IN
CANADA
IT’S YUUUUGGGEE!!!

5. TAX REFORM HIGHLIGHTS
• LOWER PERSONAL & CORPORATE TAXES
• CORPORATE TAXES = 35% TO 21%
• PERSONAL LOWER BY ~2-3% (TOP RATE NOW 37%
VS 40%)
• LIMIT ON MORTGAGE DEDUCTIONS
• LIMIT ON SALT
• CHILD TAX CREDIT DOUBLED (MEANS TESTED)
• ESTATE TAX EXEMPTION DOUBLED -
$11.2MM/PERSON
• BUSINESS OWNERS
• ONE TIME TAX FOR OF 15.5% ON CASH RETAINED
EARNINGS IN THE BUSINESS…OUCH!
• GILTI TAX GOING FORWARD

6. CHANGES TO STREAMLINE FILING
• 3 years of 1040’s
with all related
schedules
• 6 years of FBARS
(form 114)
• Easiest time to
become compliant
• Some indication that
this program may be
sun-setting

7. IRA/401k – WHAT ARE YOU
OPTIONS HERE IN CANADA?
OPTION #1 - ROLL INTO RRSP
• NEED EARNED INCOME IN CANADA (STILL WORKING)
• LOOSE “STRETCH FEATURE OF IRA”
• MAY MAKE SENSE FOR SMALL ACCOUNTS <$100K
OPTION #2 – LEAVE AS IS
• UPDATE YOUR ADDRESS WITH THE CUSTODIAN
• MAY NOT BE ABLE TO MAKE ANY CHANGES GOING FORWARD
• IF THEY ARE NOT ALLOWED TO HOLD IT AND SEND YOU THE
FULL DISTRIBUTION, PROCEED TO OPTION #3
OPTION #3 – FIND XBorder CUSTODIAN
• AVOID FREEZE ON ANY NEW TRADING
• INVEST IN EITHER CAD$ OR USD$
• CONSOLIDATE ACCOUNTS & MANAGE RISK
• ROLLOVER CHART

8. INHERITING AN IRA
OPEN AN “INHERITED IRA” ACCOUNT AT A US
CUSTODIAN FIRST, THEN NOTIFY THE CUSTODIAN OF THE
INHERITED IRA TO MOVE THE FUNDS INTO YOUR NEW
INHERITED IRA ACCOUNT
• NO WITHOLDING TAX
• NON TAXABLE EVENT
INHERITED IRA’S MUST BE ROLLED INTO AN INHERITED
IRA ACCOUNT, UNLIKE TRADITIONAL IRA’S YOU DO NOT
HAVE THE 60 DAY GRACE PERIOD.
IF YOU GET MAILED A CHECK PERSONALLY…DO NOT
CASH IT AND CONTACT THE CUSTODIAN

9. ROTH IRA’s.. THE GIFT THAT KEEPS GIVING
LIFETIME
DISTRIBUTIONS:
$10.65MM
TAX-FREE!

10. Other Topics
• US Vacation/ Rental Property
• Residency of a trust or estate
• Cross border wills
• US Living Trusts
• TSFA’s and Canadian mutual funds
• Renunciation
• Gift tax
RAYMOND JAMES LTD., member – Canadian Investor Protection Fund

11. QUESTIONS?
BRENT ENGLAND - HUTCHESON & CO
250.341.2400
brent@hutcheson.ca
CHRIS STOOKSBURY – BEACON HILL - RAYMOND JAMES
778.433.1314
Chris.stooksbury@raymondjames.ca
RAYMOND JAMES LTD., member – Canadian Investor Protection Fund