Episode 83: When Snowbirds Fall in Love: Cross-Border Tax Traps Canadians Moving to the U.S.

What happens to your RRSP, your home, and your retirement savings the moment you follow your heart across the border?

Of all the emails Gerry receives, the ones that concern him most come from snowbirds who've fallen in love with an American and are now making a permanent move south with their heart fully invested and their tax plan nowhere near ready. In this episode, Gerry sits down with Calgary-based US tax specialist Peter Blomfield to walk through the most common and costly mistakes Canadians make when transitioning from snowbird to U.S. resident. From departure tax to state-level RRSP exposure, from LLC pitfalls to the principal residence trap, this is the conversation to have before your heart makes the decision for you.

What You'll Learn in This Episode

• Why the IRS's reporting requirements catch most Canadians completely off guard and what the penalties look like when you miss them

• The difference between immigration residency and tax residency, and why confusing the two can cost you

• How state tax rules vary dramatically and why Hawaii and California are two states where RRSP holders face a nasty surprise

• Why crystallizing gains inside your RRSP before you leave Canada may be one of the smartest moves you can make

• The Canadian principal residence exemption vs. the U.S. version and how a tax-free sale in Canada can become a taxable event the moment you cross the border

• The LLC warning every Canadian investor or entrepreneur needs to hear before setting up a U.S. business structure

• Why having a U.S. lawyer set up your investment structure without a cross-border accountant in the room is a recipe for penalties

• The foreign tax credit and how rental income from a Canadian property gets reported once you're a U.S. resident

• A real-world scenario: Bruce and Susan, $2M in assets, an RRSP, cash, and a principal residence. What does departure planning actually look like?

Resources & LinksPeter Blomfield — Blomfield Tax: blomfieldtax.com

Email Peter: [e-mail]

Coming Soon: The Snowbirds Expat Radio Book