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U.S.-Canadian Dual Taxation Pitfalls: Reporting Issues and Planning Opportunities for U.S. Taxpayers

Navigating Tax Treaties to Minimize Tax on Passive Income and Pass-Through Income

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Friday, January 19, 2024

Recorded event now available

or call 1-800-926-7926

This course will provide tax advisers with a thorough and practical guide to the tax reporting requirements and planning opportunities for U.S. taxpayers with earnings or assets in Canada, as well as Canadian citizens with U.S. tax reporting obligations. The panel will discuss U.S. tax law and treaty provisions designed to avoid or mitigate dual taxation, describe Canadian residency and expatriation rules, and detail the U.S. reporting and payment obligations specific to passive income as well as Canadian trade or business activity. The webinar will also provide helpful information on tax reporting of cross-border trust ownership.

Description

The Canada-U.S. border is the longest contiguous international border on earth. The geographical and demographic similarities between the two countries contribute to the world's most significant trade relationship between the two countries. Given these harmonious and long-standing relations, Canadian resident taxpayers frequently get caught up in the U.S. income tax system and vice versa.

A critical component of this cross-border business activity is avoiding dual taxation on income and gains. The U.S. and Canada have a comprehensive tax treaty system that addresses most dual taxation concerns. As in all international planning, tax advisers must understand the particular provisions to avoid an unpleasant tax bill--or maybe two.

Among the planning challenges for cross-border activities is navigating the tax treatment of LLCs and other U.S. disregarded entities. Canadian owners of U.S. LLC shares could face dual tax layers. Tax advisers for clients using LLCs will need to carefully plan on both sides of the border.

Other areas of concern in U.S.-Canadian tax planning include the treatment of passive income and tax considerations of cross-border pension ownership, contributions, and withdrawals. The extensive U.S. tax reporting requirements imposed on taxpayers with U.S. filing obligations are hovering over all these concerns.

Listen as our experienced panel provides comprehensive and practical guidance on navigating U.S.-Canada cross-border tax planning and reporting issues.

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Outline

  1. U.S.-Canada tax treaty overview and dual tax mitigation provisions
  2. Treatment of U.S.-based LLCs and pass-through entities in cross-border situations
  3. Passive and unearned income treatment
  4. U.S. tax reporting requirements of Canadian-sourced investments
  5. Limitation of benefit provisions

Benefits

The panel will discuss these and other relevant topics:

  • Tax treaty provisions for mitigating dual taxation on ownership of cross-border LLCs and other pass-through entities
  • Limitation of benefits clauses and provisions in the U.S.-Canada income tax treaty
  • Key risks and challenges of passive/unearned income in cross-border situations, including an update on current Canadian legislative proposals with respect to Canadians earning passive income and new limitations on the deduction of interest in Canada
  • U.S. reporting requirements of Canadian-sourced investment

Faculty

Blazejewicz, Jessica
Jessica Blazejewicz, CPA, CA
Senior Manager, International Tax
BDO Canada

Ms. Blazejewicz, CPA, CA is a senior manager with the international tax services group of BDO Canada LLP. With over 14...  |  Read More

Mei, Philip
Philip Mei, CPA, CGA
CPA, CGA
Andersen

Mr. Mei works extensively with U.S., Canadian and cross-border tax issues for individuals. He specializes in tax...  |  Read More

Sameen, Leena
Leena Sameen, CPA
CPA
Andersen

Ms. Sameen is a Senior Tax Manager at Andersen in Canada’s Calgary office.

 |  Read More

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