Apr 15, 2009 – 8/14 – Dan Walkow

In this interview Dan turns the tables on David and asks him about tax consequences about several scenarios of investment including on death benefits.
Beneficiary designations, US retirement accounts, cross-border implications of retirement investments in “the other country”
Segment 1:
Registered Retirement Savings Plans – it turns out that David’s father was the manager of Monarch Life Insurance Co. and at times during David’s early years Duff Roblin (future primier of Saskatchewan) and John Diefenbaker (future Prime Minister of Canada) used to have meetings with him discussing things like pensions and such for the working man.
Tax Deferred Savings Plans – discussion of similarity to a ROTH IRA in the US.
Designation of beneficiary of RRSP – can only be rolled over to spouse or disabled child. The total RRSP at the demise of the surviving spouse (or disabled child) is taxable as income
David is of the opinion that RRSPs may not be the best way to invest for retirement in many cases. Listen for why
Segment 2 (click here to just view this segment)
Dan quizes David on taxation and beneficiaries of US retirement programs
Dan is one of the very few people who can sell both a US IRA and a Canadian RRSP in Canada or US – and manage them after their owners move away from the jurisdiction of their original investment vendor.
American retirement programs – IRA – Individual Retirement Account and Roth IRA (which is similar to the Canadian TFSA)
Rolling IRA to Roth IRA – whether this is good from a tax perspective
Having more than one IRA account
Beneficiary aspects in the US – Name your children and roll the IRA to them.
Age where it is necessary to take distributions from IRA
Other retirement accounts including 401K – “a company – group Retirement plan” – must be rolled over to IRA when you leave the employment. This is especially a problem for a Canadian laid off from a US company – having returned from the US they have no way to roll the 401K because they’re now in Canada – except that Dan’s company can deal with this because they are able to deal across the border in both jurisdictions.
David continually sees clients who have been “forced” to liquidate their 401K (or IRA) when they moved back to Canada, even though there is no real reason – only the “policy” of the vendor who no longer can deal with their client who now resides outside the US jurisdiction they are allowed to deal in. Again, Dan’s company can deal with this situation
Taxable jurisdictions for working in a foreign country. Loss of options for rolling retirement plans to children in the US after moving back to Canada.
Gifting the proceeds of a retirement plan to kids and spouse – amounts and rules
The generation skipping tax
Estate tax on estates over $3.5 million – example of how this works.
In David’s opinion it is most likely that an American estate will pay tax to Canada on estate than vice versa if assets are held on both sides of the border
Discussion of the Canada/US tax convention – examples of when you are taxable on your world income
Canada taxes on citizenship (i.e. world income) if they can’t prove residency outside of Canada – examples of people working out of the country and being or not being a non-resident of Canada for tax purposes. US taxes on world income regardless of residency.
Differences in tax regime between US and Canada
David shows that Canada has a lower tax rate for most cases. This does not even take into account the fact that Canadians also have medical from the government!
Examples of different taxation in BC vs California

Duration : 0:9:50

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