Canada/US Cross-Border Planning Revisited with Terry Ritchie | E089

Financial Planning For Canadian Business Owners

Today we have Terry Ritchie. He is Jason’s go-to guru on all things for American Canadian cross border, and also a friend. Terry is a vice president and partner at Cardinal Point Capital and Cardinal Point Wealth Management, a cross-border or ICPM firm specializing in the cross-border space.

Episode Highlights:

• 1.41: Terry’s responsibility as one of the private wealth managers is to work with typically private clients and individuals with cross-border issues.
• 4.29: In Canada, if you die and do not leave things to your spouse, you must pay all reliable due taxes. Whereas in the US, it's not the same.
• 5.08: In the US, most of the folks who in prior years would have been exposed to the significant estate tax are now off the rules because the tax exemptions have crept up over the years.
• 13.51: Whenever you are over the $60,000 threshold, that's your barometer in the US to determine whether you are filing a requirement. There may not be a state tax at the end of the day, but there may be a requirement to file, says Terry.
• 15.37: The closest counterpart to the tax-free savings account in Canada from the US perspective would be a Roth IRA.
• 16.13: If you do anything like an American in Canada, like setting up a bank account or tax-free saving account, additional compliance requirements must be dealt with on the US side, says Terry.
• 21.03: Framing taxes as a cost-benefit is a way to get around where the breaking point is or where the client wants to make the call for assets, says Jason.
• 26.43: If you are an American Canadian and you have got some property, and if there may be some tactics closure on the US side or you remotely cell it, it's good to keep track of any improvements and receipts when you did it.
• 32.09: We need to think from the IRS and CRA perspective that there is going to be withholding tax requirement that could come into play here when a Canadian ultimately sells their property, and that process can be very, very timely, says Terry.

3 Key Points:

1. If nothing changes on the gift and state rules and other tax rules that were put into play here, from the end of 2025 to the beginning of 2026, the estate and gift tax exemptions and income tax rates will go back to what they were ten years ago, says Terry.
2. Terry talks about the fact that Canadian citizens who never have been American could also find themselves on the subject of the US estate tax.
3. Some people decide to go to Florida, Arizona, or wherever and want to buy a place. Terry explains what should they be concerned about, and what are the best practices to do that?

Tweetable Quotes:

• “Snowbirds or non-residents in the United States have a non-resident state tax imposed on them if they own certain kinds of defined as a US set of assets.” – Terry
• “People don’t realize that assets are not just stock. It can also be Canadian-based mutual funds and ETFs that qualify as US assets.” – Jason
• “Sometimes, it may make sense to hold assets on a joint base and then have transferred death deeds after that.” – Terry

Resources Mentioned

• Facebook – Jason Pereira’s Facebook
• LinkedIn – Jason Pereira’s LinkedIn
• Terry Ritchie - [e-mail]

Full Transcript

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