Mahrt Investment Group

Cross Border Planning

Navigating the complexities of cross-border connections, due to citizenship or tax residency, can often seem overwhelming. Drawing on our experience with the unique tax, estate, and investment considerations involved, we strive to deliver comprehensive solutions tailored to your distinct cross-border needs.

Our Approach

At Mahrt Investment Group, our approach to cross-border planning is centered around understanding the unique financial complexities that individuals with connections to both the United States (U.S.) and Canada face. We recognize that cross-border situations require a specialized approach, considering the intricacies of U.S. tax status, ownership of U.S. assets, residency, and the ever-changing tax and legal landscapes. Our goal is to identify issues and opportunities to optimize your financial situation across borders.

We regularly work with our clients cross-border tax advisors to ensure alignment with their tax and wealth transfer needs. By collaborating with cross-border tax experts, we can dive deeper into the details and ensure that your cross-border planning is comprehensive, compliant, and optimized to maximize your financial outcomes. This collaborative approach allows us to address the complexities of your financial situation with precision and efficiency.

With our expertise and personalized guidance, we aim to simplify the complexities of cross-border planning, empowering you to make informed decisions and navigate the intricacies of your financial affairs effectively. Whether you require assistance with tax considerations, estate planning, or investment strategies, we are here to provide you with comprehensive solutions that optimize your financial situation across both the U.S. and Canada.

U.S. Persons Living in Canada

U.S. persons residing in Canada have to balance both Canadian and U.S. tax considerations. These complexities include the obligation to file tax returns reporting worldwide income in both countries. Avoiding double taxation is critical and necessitates careful consideration of foreign tax credits in both Canada and the U.S. Particular attention should be given to aspects such as the implications of transferring accounts from the U.S. to Canada, the IRS’s view on certain Canadian registered accounts (like RESP, TFSA), and the differences in capital gains treatment between the two countries.

Additionally, understanding the nuances of estate and gift taxes is equally important. U.S. persons are subject to U.S. estate tax on their worldwide assets and gift tax on gifts made during their lifetime. Potential exposure to these taxes can often be mitigated with appropriate estate planning strategies. Remember, each person’s situation is unique, so personalized guidance is recommended for effectively managing these intricate cross-border tax considerations.

What you may be thinking

  • What are the IRS rules regarding Canadian registered accounts such as RESPs and TFSAs?
  • How can I effectively coordinate the principal residence exemption between Canada and the U.S.?
  • Should I consider transferring my U..S retirement accounts (401k, IRA) to Canadian equivalents?
  • What strategies can I employ to navigate the onerous reporting requirements under PFIC rules for certain Canadian investments held in non-registered accounts?
  • Am I eligible to collect both CPP and Social Security benefits, and is there a reduction?
  • What estate planning strategies should I consider for minimizing U.S. estate tax on my worldwide wealth?
  • What are the tax implications and considerations when gifting money to my children?

What you may be thinking

  • What are the tax implications of owning real estate in the U.S. as a Canadian citizen?
  • How is rental income from U.S. property taxed for both U.S. and Canadian tax purposes?
  • What is the impact of U.S. taxes when I sell my U.S. property?
  • What steps can I take to minimize the potential exposure to U.S. estate tax while owning U.S. property?
  • Do I need to have a separate Will in the U.S. for my U.S. property?
  • What is the most tax-efficient structure for a Canadian citizen to purchase and hold real estate in the U.S.?

Canadian Snowbirds with U.S. Real Estate

We understand the unique tax and estate implications faced by Canadian snowbirds who own real estate in the U.S. When it comes to effectively managing these considerations, it is crucial to have a comprehensive understanding of the tax obligations, including income tax relating to rental properties and potential capital gains taxes upon sale. Seeking professional advice prior to any real estate purchase is strongly recommended, as it allows you to proactively plan for asset transfer and optimize your tax position. Additionally, it is essential to consider U.S. estate tax exposure and the need for probate, which highlights the importance of ensuring that your Canadian Wills and other estate planning documents align with U.S. legislation or if there is a need for additional U.S. documents.

Canadians Repatriating from the U.S.

Transitioning back to life in Canada after living in the United States can come with its share of complexities. While the prospect of returning home is exciting, it’s essential to be aware of the tax and financial considerations that can impact this transition. From understanding your tax residency status and obligations, managing your retirement accounts and social security, to planning for the sale of your U.S. residence, each of these elements plays a significant role in your repatriation journey. It’s vital to consider how these aspects will be treated once you are a Canadian resident again. This comprehensive planning can help pave the way for a smoother transition.

What you may be thinking

  • What happens to my U.S. retirement accounts (401k, IRA) when I move back to Canada?
  • How does the sale of my U.S. property impact my Canadian taxes?
  • How soon will I be eligible for Canadian healthcare coverage after repatriating?
  • How does repatriation affect my social security benefits?
  • Do I need to file a U.S. tax return if I am receiving U.S.-sourced Social Security benefits or pension income as a non-U.S. person?

What you may be thinking

  • What qualifies as a U.S. situs asset?
  • How do withholding taxes apply to U.S. situs assets?
  • How do U.S. tax regulations apply to specific accounts, like RRSPs and TFSAs?
  • Will my U.S. situs assets be subject to U.S. estate tax if I’m not a U.S. resident or citizen?
  • How can I reduce my potential U.S. estate tax exposure?

Canadians with U.S. situs investments

Many Canadians own U.S. situs assets, which may include shares in U.S. companies, real estate, or tangible property located in the U.S., among others. While these assets can represent valuable investment opportunities, they also come with certain tax and estate planning implications. It is important to understand how the various U.S. taxes apply to these assets, such as the withholding taxes on certain types of investment income or within specific accounts. Furthermore, Canadians should be aware that owning U.S. situs assets could expose them to U.S. estate taxes even if not a U.S. citizen or resident. Understanding and navigating these complexities is critical for optimizing financial planning and minimizing potential tax liabilities.

Cross Border Planning
Strategies & Analysis

Real Estate Planning
Evaluating the benefits and implications of holding real estate properties in trusts or other appropriate legal structures, considering factors such as tax efficiency, estate planning, and asset protection.
U.S. Situs Asset Reduction
Implementing strategies to reduce U.S. situs assets (assets subject to U.S. estate tax) by utilizing tax-efficient investment vehicles, estate planning techniques, and other strategies to minimize exposure to U.S. estate tax.
Retirement Account Conversion
Assessing the advantages and implications of converting retirement accounts such as 401(k) to Canadian equivalents like Registered Retirement Savings Plans (RRSPs) or Registered Retirement Income Funds (RRIFs), considering tax implications, retirement goals, and cross-border tax treaties.

Social Security Coordination 

Analyzing the impact of cross-border residency on Social Security benefits eligibility, understanding the coordination of benefits between the U.S. and Canada, and optimizing strategies to maximize Social Security benefits.
Gifting and Wealth Transfer

Developing gifting strategies that take advantage of cross-border gifting rules, considering tax implications, exemptions, and potential tax-efficient wealth transfers between generations. 

Wealth Repatriation

Explore strategies for repatriating wealth from one country to another, such as managing currency exchange rates, tax implications, legal requirements, and practical considerations. 

Related Planning Areas

Retirement Planning

Creating a tailored plan to achieve your retirement goals and maintain financial security post-work

Tax Planning

Minimizing tax liabilities and maximizing tax efficiency to optimize financial outcomes

Estate Planning & Wealth Transfer

Developing strategies to efficiently preserve and transfer your wealth to future generations

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