Hi there fellow BP members,
I am looking for someone who is experienced in setting up cross border entities for Canadians. Before I start buying properties in the US. Please message me if someone knows of any accountants specifically in the Ottawa, Ontario area.
@Dino Cardamone - I am not an Accountant, but i can help you setting up the entities. I have done that multiple times and I am based in Ottawa. I would do it on probono basis for you
Thanks Haseeb, I appreciate the offer. I might take you up on your offer.
Be careful. It is relatively common knowledge that LLC's can be problematic for Canadians because they may cause double taxation. Canada (CRA) considers an LLC to be a corporation for tax purposes while the US considers it to be a partnership and taxes it via personal taxation. The Canada-US Tax Treaty does not let you claim back personal tax paid in the US against corporate tax paid in Canada via a Foreign Tax Credit. Conversely, it has been the prevailing opinion that LLP's work ok because Canada considered them as partnerships for tax purposes.
But now, I am seeing reports starting in spring 2016 that the CRA is going to start considering LLP's as corporations like they do LLC's. Apparently this initially applies to LLP's only for two states (Delaware and Florida as I recall), but it seems likely that will be extended to other states as well. Reports I have seen say that there will be a temporary grandfather clause that applies to current LLP's until some time in 2018.
For now, I am waiting to see how the dust settles before determining how to respond for my existing LLPs. It sounds like the suggested approach is to convert LLP's to LP's...but that will lose the liability isolation protection (which was the whole point) as I understand it. On the other hand moving a property entirely out of an LLP would probably trigger capital gains tax. Anyway, I am going to wait to see.
If I was just starting up investments in the US (as a Canadian investor) I would probably just hold the properties in my own name and protect myself with as much liability insurance as I could find.
I am just an investor who reads, and have no credentials to offer advice. Please do not take this as advice, other than "to be careful".
Thanks Gord for chiming in. Yes I'm well aware about not going the LLC route. I'm being very careful with this subject because I don't want to be double or triple taxed and get in trouble with both the US and Canadian Tax Man.
I really appreciate your info though.
If you decide to set up an entity I'd encourage you to get an attorney who specializes in entity creation to put it together for you. Before you do that you'll also want to consult with a cross-border accountant to make sure you consider the various tax angles that would apply to you (everyone's situation, goals and business plan is different). PM me if you want to know who I use.
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