Establishing Canadian Residence for tax purposes

[J_V]

I have been asking everyone for a good solution to minimize taxes, and I haven't been satisfied with an answer. Maybe you guys could help. Is establishing a residence in Canada an option? What would I have to do to do it? Could I just put money in a Canadian bank? If I rent an apartment there, can I claim I live there (eventhough I don't plan on ever staying there, unless I got up to fish)?

Has anyone done anything like this?

[Greg (FossilMan)]

While I'm not 100% sure, I'm pretty sure that to legally establish residency, you need to live somewhere at least half the year. While you might be able to get away with faking it by renting an apartment and the like, you will be guilty of tax fraud and other crimes if you get caught. I doubt it's worth it.

Finally, even though successfully doing this might allow you to avoid paying US taxes, you will instead owe Canadian taxes. I don't believe Canada is like England and some other countries that don't tax gambling wins. I think in Canada it is treated as ordinary income, similar to the USA.

Later, Greg Raymer (FossilMan)

[lefty rosen]

No Canada doesn't tax gaming winnings, but they have audited pro gamblers, because the government has gotten greedy and felt that they were losing thousands of dollars from these indidividual. I recall one famous case where a guy was supposedly beating the house at a provincial parlay game and because he was about 10 million in their eyes he owed them about 4.5 in taxes. Meanwhile if he was just grinding out 10,000 a year they would probably leave him alone.......

[Jimbo]

I believe you need to renounce your citizenship as well JV. To stay an American and not be liable for the first $70,000 in earned income to be subject to taxation you must pass the 510 day rule. It basically states that you must not be physically present in the US for 510 days out of an 18 consecutive month period.

[B-Man]

I am pretty sure that even if you renounce your U.S. citizenship and move to another country, you are still obligated to pay taxes to the U.S. for some period of time--I believe it is 10 years. This of course is on top of the taxes you would owe to your new country, as the Fossilman noted.

[Jimbo]

B-Man is pretty much correct. Below is a link that elaborates on his post.

Fleeing the US to Avoid Taxation (http://www.escapeartist.com/ar2/forbes2.htm)

[J_V]

While I don't make millions, I make enough so that establishing legal residence there would be worth. I'd even go live with the Canucks for six months if I had too.

[J_V]

Thanks Jimbo. Damn, thats a long ass time. I can't envision a way to pull that off. What about just keeping money that I get offshore in a Canadian bank? Forgive me if that's a really dumb question.

[TJSWAN]

What about trying to at least minimize your state taxes??
I know a fishing guide who works all over but maintains his legal residence in Alaska for tax purposes.

[David Steele]

B-man is right. US taxes on your world wide income.

The US has a treaty with most countries, including
Canada, so any taxes you pay to Canada would not be
double taxed by the US. Since Canada's taxes are generally
higher, for most people, they don't end up owning any US
taxes, but your case would, I am guessing, be different.

D.

[lefty rosen]

Considering about nobody beats the number, or almost nobody why does the US government punish the gambler when he hits a score anyway? It's all going back in rake, unless he is among the 5 percent who can beat the house.......

[Greg (FossilMan)]

That just doesn't make sense. Either gambling winnings are subject to taxation, or they're not. You seem to be saying you are not legally obligated to pay taxes in Canada on small gambling wins, but are required to pay taxes of them if they become big wins?

If you mean that small-time winners who don't confess their gambling wins get away with it, and are not really pursued by the tax authorities, then I understand. But that doesn't mean those gambling wins aren't taxable, just that people get away with not paying the taxes due on them.

Later, Greg Raymer (FossilMan)

[Insp. Clue!So?]

No, gambling winnings are not taxable there. The exception is if one is engaged in the business of gambling, a pro poker player being an excellent example. Whether or not it makes sense, I do think that is the law based on various discussions of this topic by Canadians over the years.

[Greg (FossilMan)]

OK, that makes some sense. Recreational gamblers do not owe taxes on gambling wins, but professional gamblers do.

Thanks, Greg Raymer (FossilMan)

[skp]

"(even though I don't plan on ever staying [in Canada], unless I got up to fish)?"

But I'll have you know that there ain't a place in the United States (except maybe San Diego) that can compare to Vancouver, B.C., Canada.

[Frozen]

Allow me to post the first slighly useful post to this thread:

First of all, $10,000 is the government's magic number for scrutiny of funds. Never take out a 5-figure cashout in one check.

If you play under your own name, the key is that you don't deposit cashout checks to your own bank account. If you get audited, they'll find out right away what you've been doing. Instead, give the checks to someone with a very slim audit risk, like your 90 year old grandmother on social security. She can then withdraw your cash for you.

Of course, playing under the name of a Canadian friend, and having cashout checks sent to him is probably a better idea. Your IP address is still American, but government IP tracing is way too much of a hassle...the donut eaters won't even bother doing that.

Of course it's every American's patriotic duty to pay his taxes to fund the oh-so-beneficial war on drugs, and welfare payments to lazy able-bodied adults.

[Jimbo]

"Allow me to post the first slighly useful post to this thread:"

OK, Frozen we are ready and waiting. I suppose the previous paragraphs you just wrote were a warmup for the useful information to follow.

[scalf]

/forums/images/icons/laugh.gif hey fergit taxes...gay marriages legal in icicle land....that's why people want to establish residency there..... /forums/images/icons/cool.gif /forums/images/icons/spade.gif

[M.B.E.]

The article linked to by Jimbo (http://www.escapeartist.com/ar2/forbes2.htm) merely says that after you renounce citizenship you may still be taxed on your U.S. income. I don't see how the U.S. could tax a non-U.S.-citizen on income from Canada (or Costa Rica).

But in any event you would apparently have to renounce your U.S. citizenship; and you'd be well advised to get another citizenship lined up beforehand. Canadian citizenship would take at least three years to acquire.

[Cyrus]

"$10,000 is the [American] government's magic number for scrutiny of funds. Never take out a 5-figure cashout in one check."

And there's also a magic word one has to always remember when acting like that : structuring.