June 2019

Attention Green Card Holders

Do you have a current Green Card or even an expired Green Card? If the answer is yes to either one of these questions. Surprise! you are an American for tax purposes – this little surprise includes filing a 1040 (US tax return) and any other foreign reporting requirements such as an FBAR, Foreign Trust Return 3520 and 3520 A, the PFIC (8621) etc. This must be done yearly until you officially surrender your Green Card – it does not matter where in the world you reside. Please refer to paragraph three for the USCIS’s official position on this. American citizens in Canada find these requirements burdensome and sometimes annoying, as some Americans have told me – why do it to yourself?

The Green Card allows for permanent residency in the US and that includes the honor of all tax requirements and carries basically the same requirements and rights as the American Citizen. The United States is only one of two countries in the world that taxes on both Citizenship and Residency – the other being Eritrea. Holding a Green Card, expired or not is basically saying “look at me, I’m an American resident.”

“Еven if the USCIS no longer considers a Green Card to be valid (for immigration purposes), the tax-related obligations that come with it will continue to apply – until an official written statement from the USCIS confirms that the Green Card has been revoked or relinquished.”

In my next post – I will address the topic of relinquishing that Green Card.

Esmeralda’s American Holiday: What Happened in Vegas Followed Her Home

Our friend Esmeralda is a Canadian citizen who loves to gamble – she considers it her “retirement planning” and cannot live without it. “I love to play poker, I have some element of control, you know, it’s kind of like investing in mutual funds (MF’s) or real estate. I love the thrill, plus it is 100% tax exempt”. Esmeralda, is correct that her poker gambling is exempt, along with her other gambling such as her purchases of the weekly Lotto 649 or the night at her favorite slot machine – this is true IN CANADA, for Canadians. As you may or may not know, it is different for our American friends living in and gambling in Canada (more in a different post).

I remember talking to Esmeralda about her “strategic tax planning” and how she hasn’t had a trip in over 25 years. She had mentioned going to Vegas to kill two birds with one stone. “I want to travel and build wealth and this can all be accomplished by going to Vegas”.

She had enjoyed her trip except one minor detail – she was taxed on her poker winnings – she had a very good winning streak, the best in her life. Boy, she was mad as could be. “I win $100 000.00 and I only get to come back with $70 000.00, what the heck”, she was screaming at this point. “They take my money, they give me this stupid form (1042-S), and they expect me to be happy! How can I be happy?”

She did not like my explanation in the least – things are different in Vegas or anywhere else in the United States when people like to plan their retirement “Esmeralda style”. It is a fact that US sourced income from gambling and lotteries is fully taxable – with the exception of a few “exempt games”. “What are those games? I lost $30 000.00 and don’t like it”. For information and planning purposes the exempt games are: craps, blackjack, big-6 wheel, roulette, or baccarat. The general rule was a surprise to Esmeralda, as it is to many other gamblers from around the world. Non US persons (nonresident aliens) are generally subjected to a 30% tax with holdings on gross gambling winnings. Canadian citizens and residents are able to get some or all of this money back due to a special provision in the tax treaty – U.S. –Canada Tax Treaty Article XXII (3) – under the condition that they file a US return, the 1040NR. Canada’s relationship with the US is so special that there is a special place on the 1040NR just for us.

In my next post “Esmeralda Want’s Her Money Back”, I will explain to Esmeralda, how to go about recovering some or all of the money and what she should do if she gambles in the future – and knowing her – it is going to be sometime soon.

Congrats to the Raptors – Should there have been a game 7?

What an exciting finals to watch – so exciting that I actually watched the NBA finals for the first time in over 20 years. A better reference to the number of years its been would be when Anfernee Hardaway and Shaquille O’Neal both played for the Orlando Magic.

In my opinion, the only reason I watched this year was because I’m a Canadian. I believe that’s why a lot of people watched it. We call hockey, Canada’s national sport but the Stanley Cup hasn’t been won by a Canadian team since 1993 so one can imagine that we, as Canadians were exited when we won the NBA finals on American soil since basketball is more America’s game than Canada’s – once again, in my opinion. It is also easy to get caught up in all the excitement since the Toronto Raptors are Canada’s only NBA team.

The Raptors played well, there is no disputing that but there could have easily been a game 7 had Klay Thompson not have gotten injured on the court – he is a sharp shooter and he was on fire – even injured he made his two free throws -one can only wonder if the outcome would have been the same if he was able to continue. In my opinion, the Golden State Warriors played an excellent game considering that Kevin Durant was out for most of it and Klay got injured shortly afterwards since they only lost by four points.

One can also wonder if there should have been a game 6 since Marc Gasol did not make it to the free throw line – Toronto only lost by one point.

Regardless of what happened whether it be injuries or a lack of calls the Raptors should enjoy their well deserved victory over the Golden State Warriors as both teams played incredibly well to the end – but there can be only one number one. Go Raptors Go!