i was told that if the US corp is owned and operated by canadians (non-residents) only. that is that all owners (in this case I'm alone) are not US residents, then it is NOT liable for US taxes.
I've been told that it is where the company is managed from that determines it's tax status. So a US corp managed by a Canadian resident would incur a Canadian tax liability, and no US tax liability at all.
dmacdonal9: I think you may be correct. I logged an email to revenu canada and am still waiting for an answer. I will follow up on that. but if you read my previous links, it does state that NO taxes are to be paid in the US by a canadian owner trading stocks in the US. even if the stocks would be traded on US soil. In my case it is sometimes in Canada and sometimes in the US. the exception been that if you incorporate in a state that charges some form of frachise operating costs, such as Florida, then you are liable for that portion, and it may even be credited to the portion required to be paid to revenu canada. but if you're responsible for federal canadian taxes, does that also make you responsible for provincial? sometimes i wish i was simply a US citizen living in the US. it would be so much simpler. easy access to any broker and lower taxes. assle free.
If you get a response, I'd be interested to hear what it is. I would be very surprised though if you could trade while in the US and wind up paying no cap gains taxes at all in either country. That'd be a pretty super deal...
i would also be very surprised to know that No taxes have to be paid. in fact it's almost impossible. on another note, i also have a close friend who's brother is a US tax specialist for canadians at Raymond Chabot Grant Thornton in Montreal, he's also gonna get back to me on these issues. i'll keep the forum updated. my main goal is to be able to trade from the US with any broker I wish though. it really didn't go over well when TD Waterhouse bought RJT (which was great for trading) and then proceeded to increase the fees 200%. you'd think they would at least mind their business outside of Canada. it's not enough that all the canadian banks are in a pact to keep fees extremely expensive here in Canada, that they have to buy US brokers and do the same thing there? I only wish that some day someone here in Canada will have the guts to take control of the situation and start charging low fees like in the US, and kick them where it counts. right in the extortion pool of income made from the backs of ordinary canadians. canadian banks really know how to keep comtrol of us. the other day I got a call from TD bank services wanting to sell me automobile and home insurance policy. forget about it. never in a million years. all that's gonna do is make them stronger and then someday they will take over the industry and increase the fees by astronomical amounts.
Iâm fed up with paying $29.00 per trade when I see US discounters charging $5.00 to $15.00 . I am planning to get a IRS Taxpayer ID Number, a US address, and a US bank account. Being that I will still have to claim to be a US resident to open an account, I am assuming that I wonât be able to file a W8-ben form as a foreign client. Will I be required to file an IRS return? Will the US Brokerage withhold taxes on capital gains? I am resigned to paying taxes in Canada on any gains in a US account and could live with filing two tax returns. I just donât want to pay twice. Does this scenario make any sense?
Have you considered setting up a trading company in a tax haven country? Then you have only one bunch of tax collectors to deal with. Don't know the pros and cons myself, just an idea.
what would be the "one bunch of tax collectors" you referring to? i heard that most tax haven companies can be set up for around 3000usd. and maintained for about half that price the following years. again if you are making serious money. its an idea. caveat emptor. american express and other credit card companies are beginning to snitch on their clients who have tax haven accounts to the US government. so beware to those who wish to avoid taxes. in most countries it is a criminal offense to avoid taxes. just a thougth. if the cc companies are doing this, then other forms of snitches will soon show themselves. p.s. if you open a bahamian offshore account and you then proceed to open a US brokerage account. how will you avoid to pay the capital gains tax of 30% on each sell amount, that the W8-ben protects you against? doesn't the W8-ben tell you where you're from?
The tax collectors in the country where you live. In Canada that would be the CCRA, as you are taxable on your worldwide income as a resident of Canada. That is, unless you are planning to do something illegal, which I wouldn't recommend. I am just commenting on ways to avoid the problem of Canadian regulators preventing Canadians from getting US brokerage accounts, not suggesting criminal behaviour. Also anyone considering moving to the US to trade should make very sure that they break all ties with Canada. That means no residence here, no wife and kids still here, no club memberships, no RRSP, etc. Unless you do, the CCRA will still consider you liable for Canadian taxes.