Canadian green card holder filing dual status tax return in US - need advice on my transition plan

Thanks for the detailed response! That's a great point about the green card test potentially making me a US resident for the entire year. Do you think it would be better to file as a full-year US resident instead of the dual status approach? And regarding the Canadian principal residence exemption - I lived in the condo for 5 years before renting it out for the past 2 years, so I'm hoping that still qualifies.

Filing as a full-year US resident might actually be cleaner from the IRS perspective since you held a green card during part of the year. The substantial presence test plus green card status makes a strong case for full-year residency. This would mean filing Form 1040 for the entire year and reporting worldwide income, but you could still benefit from foreign tax credits for taxes paid to Canada. For the principal residence exemption, Canadian rules allow you to maintain the exemption during periods when you don't occupy the property, generally for up to 4 years, if you eventually return to live in it. Since you're planning to formally cut ties with Canada, you should still qualify based on your 5 years of occupancy, but make sure to file the principal residence designation when reporting the sale.

How exactly does taxr.ai work with cross-border situations? Does it just interpret the forms or does it actually help with the filing strategy? My spouse just got a green card and we're totally confused about how to handle our Canadian investments.

That sounds interesting but I'm skeptical of AI tax tools. Can it really understand the nuances of US-Canada tax treaties? I talked to a cross-border accountant who charged me $1200 and seemed confused himself about dual status returns.

Taxr.ai works by analyzing your specific documents and tax situation to provide guidance on cross-border filing strategies. It's not just form interpretation - it actually helps identify the filing approach that makes most sense for your specific circumstances. It was particularly helpful for me with the timing of residency termination and how to handle my Canadian investments. Regarding the treaty nuances, I was skeptical too initially. What impressed me was how it specifically cited relevant sections of the US-Canada tax treaty that applied to my situation and explained the implications in plain language. It's definitely more comprehensive than generic tax software, and considerably more affordable than the cross-border specialists I contacted who were quoting $3000+ for my situation.

How does Claimyr actually work? Do they just call the IRS for you? Seems weird to pay someone else to make a phone call that I could make myself.

This sounds like a scam. Why would I need a service to call the IRS? I've gotten through to them before without paying anyone. And how would a random IRS phone agent even know the complexities of US-Canada tax treaties? They usually just give general guidance.

Claimyr doesn't call the IRS for you - they hold your place in line and call you when an agent is about to be available. I tried calling the IRS myself multiple times and kept hitting the "call volumes are too high" message where they just disconnect you. Claimyr's system keeps dialing and navigating the phone tree until there's an actual spot in the queue. You're right that not every IRS agent will be familiar with international tax treaties. I made sure to ask for a representative who specializes in international taxation when I got through. The person I spoke with was surprisingly knowledgeable and specifically referenced the US-Canada tax treaty provisions. They couldn't give tax advice per se, but they did clarify how the IRS interprets dual status for green card holders, which was exactly what I needed.

Thank you for bringing up these important points! I have about $35K combined in my Canadian accounts, so I'll definitely need to file the FBAR. You're right about the TFSA - that's exactly why I'm planning to close it before October. Regarding RRSPs, I do have about $80K in an RRSP. I wasn't aware of Form 8891 - does that need to be filed annually or just once?

The good news is that Form 8891 was actually eliminated in 2014! The IRS now automatically recognizes the tax deferral for RRSPs under the US-Canada tax treaty without requiring a specific form. You'll still need to report the existence of the RRSP on your FBAR and potentially on Form 8938 (Statement of Foreign Financial Assets) if you meet the filing threshold, but the income can continue to grow tax-deferred. One other consideration for your plan: make sure you've researched any state-specific requirements. California, for example, doesn't always follow federal treatment of foreign income and may have different rules regarding your Canadian accounts and investments compared to federal regulations.

This is incorrect information. Canada doesn't have an "exit tax" in the same way as the US. What Canada has is a deemed disposition rule where certain properties are treated as if they were sold at fair market value when you cease Canadian residency. However, this typically doesn't apply to cash, personal-use property, most registered plans like RRSPs, and certain real property located in Canada.

Thanks for bringing this up. I've been concerned about this potential issue. My total assets are around CAD $1.3 million, so I should be under that threshold. Most of my assets are either in my RRSP, cash, or the condo which I'm planning to sell before becoming a non-resident. Would there be any other assets I should be concerned about for the deemed disposition rules?