Hello,
I am trying to figure out the complexities involved if I choose to let my existing 401K, roth-IRA and other mutual funds in brokerage accounts remain in US. I will have to pay some penalties/sales percentages for B class mutual funds if I decide to liquidate everything. There is some probablity that I may come back to the US after a couple of years which is another reason why I am avoiding closing all these accounts.
If I maintain the status quo, then at a very minimum I will have to file returns in both countries even if I do not stay for a single day in the US. I don't mind filling returns as long as I understand what needs to be done. I would probably just go to a tax consultant when it comes to filing for the first couple of times. However I am trying to avoid a "why didn't you do this.. duh" moment when I actually go for that.
If anybody has any knowledge or knows of websites regarding this kind of issues that information will be very helpful.
Regards,
Souvik Kar
Location: Western Hemisphere
Posted on: 28-02-07 15:45:01
As long as the institutions where you hold these assets lets you hold them (which most would), there is no harm letting them stay open, and even continue to invest. Liquidating 401k and Roth would cost you money in penalties and taxes.
Of course, if you are not employed in US, there won't be investments in 401k. Also, to invest in a Roth IRA, you will have to be resident in US.
Yes, you will have to file US returns to report the capital gains and dividend earnings.
One of the annoying things posed by a minority of institutions is that they do not accept a Cdn address and they do not accept a PO box for address. If any of your institutions annoy you such, it might be worth moving them to another institution that accepts Cdn address.
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Dimple2001
Some Banks and FI would accept a Canadian Address and they would keep sending Statments and other correspondence.
While some, would ask you to close the account (IRA, Roth, 401K, Normal Bank Accounts) if you ask them to update their records with your Canadian Address. One option is to give a friend's US address, which is what i do. The other would be to roll off the account to a more favourable bank or FI that would accept your canadian address.
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4z4z
Location: Western Hemisphere
Posted on: 01-03-07 10:48:48
The address annoyance is partly due to the Patriot Act in the US. They all like to harass the people who do things legally while letting the southern border loose to millions of illegals. Anyway, that's another story for another time.
Remember, FIs like your money. Bank One wasn't too happy when I transferred my investments to another FI. Interestingly, Bank One (now Chase) allows banking with Cdn address, but does not allow investments with Cdn address. So, they suggested special arrangements for me to retain my money there. I basically asked them to shove it since I didn't forget the hassles they put me through.
Some FIs hesitate to take Cdn address for only one reason. Their computers cannot accept alpha-numeric 6 char Cdn postal code !!
Definetely, they all seem to agree on one thing...no PO boxes for addresses.
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Dimple2001
