USA Noneresident & Canada Nonresident Tax - PICKING A US / CANADA TAX PREPARER - Canadian-US-Global Income tax help - ingram

Hi David:

I am looking for advice (direction) from an Income tax expert regarding the following case:

Background: During 2005, I left Canada to reside and work in USA. My family followed me in October 2006. After October 2006 I severed all ties with Canada as per Judge Teskey’s nonresident ties list. I worked in USA until December 2008.  During July 2009, I found a Saudi/American employer (venture) for a job in Saudi Arabia (long term contract 2 years or more). My stay permit in USA was H4 until I left USA in July 2009. My wife is still working in USA on H1 visa and applied for a Green Card (I did not apply for Green Card).


1.       Should I pay taxes in 2009 to USA as a resident alien (even I am working overseas) since I have been present in USA more than 183 day (2009/2008/2007 combined and divided)?  I do not have USA work permit at this point.  (I have H4 visa)

2.       Should I pay USA taxes during 2010 knowing that I will be in USA less than 330 days? (form 673 Foreign Earned Income ). Do I need to pay USA taxes at all in 2010?

3.       Could CRA (Canada Revenue Agency) having a claim that I do not pay taxes in USA and based upon their view (you should pay taxes somewhere) and being Saudi Arabia I will be in an uphill battle with them in spite of being nonresident?  

Please provide some direction and who might be the appropriate person for USA income tax return.


david ingram replies:

First of all, I do not understand why you did not apply for a green card with your wife unless you are really intending to separate and do not want to be 'beholden' or something and never intend to work in the USA again.  If you intend to live with your wife and or ever work in the USA again, you should apply for your green card as part of her application.

Second - If you are still living with your wife, even if you do not intend to be in the US less than 35 days a year, you are not taxable in Canada if you have severed all ties and your wife (whom you are still living with - if apart - is in the USA.

Third - If you are not intending to live with your wife and do not have a green card application, and an official residence somewhere, Canada can take a run at you.

Fourth - the US form 673 depends upon form 2555 for the section 911 exemption.  If you look at the third line at the top of the 2555 form , you will see that it clearly says "For Use by U.S. Citizens and Resident Aliens Only". 

see form at

The proper name for a green card is a "Resident Alien" card.

Now to be technically correct, there are two resident alien definitions.  One is the Resident Alien definition for Immigration and the other is the Resident alien definition for income tax which involves physical presence, closer connection to the US or another country, etc. see from 8840 at to see if you think you are going to qualify for a closer connection to another country other than the US.

I do not know anyone any better to prepare your US returns than this office.  I do know others that do the same thing with equal skills..  However, I am adamant that you should likely buy an hour of my time before you get yourself caught up in a tax box with the US and Canada.  My number for a phone consultation is (604) 980-0321.  Peter or I can make the appointment.

The following are others whom I recommend for US / Canada tax preparation if you have a reason to deal elsewhere and there are lots of those. 
1.   You may have a fellow employee, your ex wife, or brother who already deals here and you want to be sure that there is no criss-cross of information.
2.   You may be thinking of separating from your present wife and she has said she is going to send her work here, or
3.   You do not like phoning anyone in Vancouver.

The following in this question about choosing and accountant are all well qualified to deal with you



What should I look for in finding an accountant who can do my Canada/US taxes? I'm a Canadian working in the US under a TN visa.

david ingram replies:

1.   Pick your accountant as soon as possible. Pick one that advertise that they are dual country accountants.  I am giving a list after this.

2.   Do not expect a 'free" exploratory visit.  We do not have enough time and anyone any good in the business was turning people down in April and June.

If you want to talk to me first, I call that a tax consultation.  I charge a minimum of $450.00 for your exploratory visit or consultation. If you then decide to hire me to do the returns, do not ask if I credit the consultation toward the preparation fee.  The answer is NO.  If you are doing a consultation, do it in November when there is time to sort things out before Dec 31st.

You can get a free bit of consultation by just hiring us to do the return and asking questions while it is being prepared. 

3.    Here are some questions to ask.

On the US side: 

a.    What is a Dual Status Return?  can a dual status return be A JOINT RETURN? If they have to look it up, do NOT deal with them.
b.   What is a dual status statement? 

c.    If you have rented your house out in Canada, what is the difference in depreciation methods.

d.   What is form 8891 -

e.   What is form TDF 90-22.1 - What is the penalty

f.   When do you have to file Schedule B?  Hint, if you have 'any' foreign financial account in any country, you have to file schedule B even if there were no earnings on that account and answer questions 7 and 8 on the bottom.

g.   If you have a corporation on either side of the border, ask about forms 5471 and 5472.

On the Canadian Side

1.   What is a departing Canada return?

2.   What is a factual resident?

3.   What is a deemed resident?

4.   What is form T1135?  (what is the fine for not filing on time)  If they have to look it up?  You do not want to deal with them.

5.   What is form T1161?  What is the penalty for not filing on time?  If they have to look it up?  You do not want to deal with them.

6.   What is form T1243?, ditto

7.   What is form T1244?, ditto

8.   How is your house taxed when you move back in if you return to Canada?

9.    Does section 45(2) apply  (No, it does not it can NOT be used if you are a non-resident).  How does Section 45(3) apply  (It does not if you claim CCA while out of the country)

10.   How long is your Provincial medical coverage good for?

11.   What happens to your Home Buyers Plan when you depart Canada.  (it is all taxable on that final return if not paid back within 60 days of leaving the country.).

This should help.  Just remember.  If a corporation is involved, you need someone who understands the question and can answer each one without 'research' or 'looking it up'.

If no corporations are involved, they do not need to know about forms 5471 and 5472.
If you are on a TN or H visa, this should be your bill.

If you are on an L visa, your company should pick up the tab.
The following are capable of looking after your returns if you do not want to send them here.

For the record, I have never met or even talked to Kevin Nightingale, Mark Serbinski,Steve Peters or Len Vandenberg that I know of or remember.  I have met and talked to Brad Howland in his home office in Victoria. .  Sonja Clarke, Steve Katz and Gary Gauvin all worked with me in my offices in the past.
The following was the answer to someone who was in need of an accountant to look after a cross border corporation. 

HINT one.

You should only use a December 31 year end for the Canadian company because the US 5471 forms will be much cheaper if you are set up as a Dec 31st year end.  By the way, failure to file the 5471 forms is a minimum penalty of $10,000 for the first 90 days and $10,000 every 30 days thereafter to a maximum of $50,000 a year per shareholder of the Canadian company.

In addition the Canadian Company will also likely end up with more than $10,000 in its account at some time and that necessitates the filing of form TDF 90-22.1 which has a minimum fine of $10,000 to a maximum fine of $500,000 plus up to 5 years in jail for failure to file.

Hint two.

When you are trying to find an accountant on either side of the border, start off by asking them what the rules are for when a 5471 and a TDF 90-22.1 have to be filed.  If they can not answer immediately, then you do not want to be their guinea pig. Now, it will be likely that the person who answers the phone does not know so do not ask them so that they can write it down, say no one is available and then have someone else phone you back after getting a chance to look up the answers.
Save the questions for the actual tax person.

Hint three.  

I would forget about the corporation unless you know it is going to make you a fortune.  It 'reallllly' complicates your life!  there is no way that being the president of a non-resident CANADIAN corporation is worth the hassles unless it is making you $100,000 a year or more in my opinion.

But you still have the corporation.

Some hints to get them done. Who could look after you?

Gary is a one person office.  Advantage - You will always get to talk to Gary.

Gary likes corporations.  I  and my three associates do not like them. I like dealing with individuals who deal cross-border withOUT corporations.


OR   Steve Peters with KPMG in Halifax at (902) 492-6011

OR    Kevin Nightingale in Toronto at (416) 733-9595

OR   Mark Serbinski in Toronto at (416) 733-0300

OR     Len Vandenberg with BDO Dunwoody in Kelowna, BC. at (250) 763-7600

OR    Steve Katz in Vancouver at (604) 732-1515

OR   Sonja Clark in West Vancouver at (604) 913-3376

OR   Brad Howland in Victoria at (250) 598-6258

Whoever you choose, you would likely do well to consult with me for one or two hours a year.  If I have a suggestion, it will be worth it.  If I can't come up with anything, you will know that what you are doing is likely the best track.  I will compare it to my dentist.  When I went in the fall of 2005, I ended  up with $16,000 to $18,000 of dental bills, a bunch of pain, and a lot of nice new caps, etc. 


Well both - the first time was expensive but dealt with years of neglect.  The second said I am on the right track. (and of course, it would not be right to leave it three.  - a month later I was in total pain with some sort of abscess  and Dr Ed Clarke fixed it 'just like that' but it took three visits.  One to do a quick fix. Two to do a root canal through a cap and three to seal it in forever.

Good luck with your tax return AND your teeth and that is my last hint.

You would not go to the dentist without your teeth.  Do not leave stuff behind when you visit your tax consultant.

Take your copies AND the assessments.  Better to have a suitcase full of stuff you might need and do not then to leave stuff behind.  Not taking it all the first time can end you up costing you twice as much for our fees.  All we have to sell is our time.


thanks kindly
all the best
david ingram replies:















He is also a Canadian


It does matter about tax on any interest your inheritance might have earned between the date of death and sale and when you receive the money.  If you were a resident of the US (resident, not necessarily a citizen) there would be no withholding tax to Canada on the interest.  as a resident of Saudi Arabia or Hong Kong. the Bahamas or Grand Caymans, the withholding rate is 25% (of the interest - not the principal). 


david ingram

david ingram wrote:
David Ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
4466 Prospect Road
North Vancouver,  BC, CANADA, V7N 3L7
Cell (604) 657-8451 -

Be ALERT,  the world needs more "lerts"
$1,000 would be the same with one rental
$1,200 would be the same with one business no rental
$1,600 would be for two people with income from two countries

This is just a guideline for US / Canadian returns
With a Rental for $350
A Business for $350 - Rental and business likely $450
8891 forms are generally $50.00 to $100.00 each.
Just a guideline not etched in stone. 


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