American living in Canada with questions regarding taxation on investments. Reti

[maxim_311]

Im an american living and working in Canada and looking at options of investing my money directly rather than converting and sending back to the states. I appreciate any help on any of my questions.

RRSP’s seem to be the go-to investment vehicle for Americans in Canada. If I invest and buy and sell stocks within an RRSP I only pay taxes when funds are withdrawn from the RRSP correct?

When withdrawing funds from an RRSP (or what would be an RIFF at the time). You are taxed at your regular income tax rate because the original RRSP contributions were tax deductible correct?

But does the USA recognize the deductible contribution when filing my US return? Would I have to pay taxes on my US return even though I didn't on my Canadian?
So when the time comes to cash out my RRSP I'll get taxed twice by the US on that money...they'll tax the initial contributions (because they don't recognize it as a deductible) and then they'll tax the distribution when I cash out the RRSP

If I were to just open a regular investment account at a brokerage I’d pay the 50% realized capital gains at my individual tax rate here in Canada. How does this work out when it comes to filing my US Tax return?
Will the US want to tax my capital gains again? How does the Canada-US tax treaty work when it comes to investments and capital gains? Does it make a difference if Im buying Canadian stocks or US stocks from a Canadian brokerage account?

Thank you for any insight or answers to any of my questions

 

[scylla]

You have to be extremely careful with investment instruments in Canada since you are American. Definitely stay far away from TFSAs. The US views these as tax shelters and you'll get screwed in your US tax return. I'm not sure how RRSPs are viewed. Again, do you research since the investment instruments and tax treatments between the two countries are so distinct. Best option is to meet with an investment advisor who is familiar with US taxation rules.

Here's some info on why TFSAs won't work for you:

http://cardinalpointwealth.com/how-the-u-s-may-tax-a-canadian-tax-free-savings-account/

 

[jes_ON]

Im an american living and working in Canada and looking at options of investing my money directly rather than converting and sending back to the states. I appreciate any help on any of my questions.

RRSP’s seem to be the go-to investment vehicle for Americans in Canada. If I invest and buy and sell stocks within an RRSP I only pay taxes when funds are withdrawn from the RRSP correct?

When withdrawing funds from an RRSP (or what would be an RIFF at the time). You are taxed at your regular income tax rate because the original RRSP contributions were tax deductible correct?

But does the USA recognize the deductible contribution when filing my US return? Would I have to pay taxes on my US return even though I didn't on my Canadian?
So when the time comes to cash out my RRSP I'll get taxed twice by the US on that money...they'll tax the initial contributions (because they don't recognize it as a deductible) and then they'll tax the distribution when I cash out the RRSP

RRSPs are popular partly because of their similarity to IRAs, and the fact that the IRS specifically recognizes them, had special forms and rules/guidelines, and recently simplified matters.

https://www.irs.gov/uac/newsroom/irs-simplifies-procedures-for-favorable-tax-treatment-on-canadian-retirement-plans-and-annual-reporting-requirements

http://www.advisor.ca/tax/tax-news/irs-updates-rrsp-and-rrif-reporting-rules-171045