October,
Nov, & Dec/1994 Pages
69-77
the
CEN-TA PEDE
david ingram's US/Canadian
Newsletter
In
this Issue:
1. $100,000 "LAST CALL" Does it affect your US return? NO!! 69
2. US MOTHERS ADDED FOR CITIZENSHIP 69
3. You may be a US Citizen and NOT know it (Children born
before May 24, 1934 of US Mothers added Oct, 1994 70
4. The T664 - At Loooooong LAST! - THE FORM 71
5. Request for Information 73
The
Canadian $100,000 TOP UP Exemption does NOT AFFECT your US Return.
MOM's an American, ARE YOU NOW A US CITIZEN? -
MAYBE YES, MAYBE NO!
President
Clinton signed a Technical Amendment Act in October and made another 400,000
to 1,000,000 Canadians instant Americans. The chart (amended from our June
Newsletter) shows how. If you were born before May 24, 1934 and your mother
was a US citizen and had ever lived in the US, YOU ARE A US citizen and have
no choice. Depending upon when your children were born and whether you ever
spent some time in the US (2 years at college for instance) some or all of
your children may be US citizens. This may be GOOD news. It may be BAD news.
IF YOU ARE A US CITIZEN, IT IS JUST AS IMPORTANT TO FILE A US TAX RETURN AS
A CANADIAN RETURN, EVEN IF YOU HAVE NO US SOURCE INCOME. If you give
up your citizenship to avoid this income tax, the IRS law still gives them
the right to tax you for income, gift, and estate tax for 10 more years. If
you die in this time, your executor is responsible to prove that you did not
give up your citizenship to avoid income, gift or estate tax. GOOD LUCK!
In
other words, if your Canadian born mother's parents were Americans by birth
or naturalization and one of them had lived in the states at any time for
any period, and you were born between 05/24/34 and 01/12/41 and YOU lived in
the United States for 2 years between ages 14 and 28, you are a US citizen
whether you want to be or not and MUST file US tax returns. Similarly, since
you are a US citizen who has been physically present (trailer at Birch Bay,
Phoenix condominium) in the US for a few years (2 after age 14), and you
have a child born after November 13, 1986, that child is a US citizen.
Pages
71 and 72 of this newsletter is a replication of the FORM T664 which is the
form necessary to claim the $100,000 exemption. There are two important
things to note here.
1.
It is possible to file the form late. If you do, there is a penalty based
upon the number of months. IN MOST CASES THE PENALTY WILL BE LESS THAN THE
CHARGES YOU WILL PAY YOUR ACCOUNTANT FOR EXTRA SERVICE FROM NOW TO APRIL
30TH.
2.
Be careful about your appraisal. If you overestimate the value by more than
10%, the penalties are worse than filing late or amending. (if challenged
six years later).
If
you wish my 10 page analysis of the situation, FAX your request to me at
(604) 649-4759.
You should send REVENUE CANADA a request for the
information shown on page 73.
Remember, the CEN-TA GROUP provides this information for real
estate and other investments as well as providing a property management
service and US and Canadian tax preparation service. Call George
Hatton, CA for Mutual Fund and RRSP Information; call Sonja Clark, CA, CPA,
LLB for US / Canadian Corporate Accounting; call David Ingram or D'Arcy von
Schleinitz for US / Canadian Tax personal tax preparation. (604) 681-1646.
Marge Maddigan at 986-6253 for property management.
NATURALIZATION
CHART
For determining
whether LEGITIMATE CHILDREN BORN OUTSIDE THE U.S.
acquired U.S.
citizenship at birth.
PERIOD
| PARENTS | RESIDENCE REQUIRED OF:
| | PARENT or | CHILD .
STEP 1 | STEP 2 | STEP 3 | STEP 4 .
Select
| Select | Measure citizen parent's residence | Determine whether child
period
in | applicable | against the requirements for the | has since lost U.S.
which
| parentage | period in which child was born. | citizenship. (The child
child
was | | (The child acquired U.S. citizen- | lost on the date it became
born.
| | ship at birth if, at time of the | impossible to meet the
|
| child's birth, citizen parent had | necessary requirements,
|
| met applicable residence | never before age 26.)
| | requirements.) | .
Prior
to | one parent | Citizen parent had resided in the | None.
05/24/34
| US citizen | U.S. (Originally only fathers could |
| | transmit; mothers added Oct, 94) | [see note (5)] .
On/after
| Both are | One had resided in the U.S. | None.
05/24/34
| citizens | | .
&
prior to | One citizen | Citizen had resided in the U.S. | 5 year's
residence in the
01/13/41
| one alien | | U.S. or its outlying
| parent. | | possessions between ages of
On/after
| One citizen | Citizen had resided in U.S. or its | 13 and 21. OR, 2
years'
01/13/41
| one alien | outlying possessions 10 years, at | continuous presence in
and
prior | parent. | least 5 of which were after age | U.S. between ages 14 and
to
| | 16, or if citizen parent served | 28. (NONE, if at time
12/24/52
| | honorably in U.S. Armed Forces: | of child's birth, citizen
|
| (1) between 12/07/41 and 12/31/46 | parent was employed
|
| (5 of the required years may | by a specified U.S.
|
| have been after age 12); or (2) | organization. This
|
| between 12/31/46 and 12/24/52, | exemption is not applicable
|
| parent needed 10 years physical | if parent transmitted
|
| presence, at least 5 of which | under *(1) or *(2) opposite.)
| | were after age 14. | Notes (1), (2), and (4). .
|
Both are | One had resided in the U.S. or its | None.
| US citizens | outlying possessions. | .
On/after
| Both are | One had resided in the U.S. or its | None.
12/24/52
| citizen | outlying possessions (3). | .
&
prior to | One citizen | Citizen has been physically present in | None.
11/14/86
| one alien | US or outlying possessions 10 years, |
| parent. | at least 5 which are after age 14 (3). | .
On/after
| Both are | One had resided in the U.S. or its | None.
11/14/86
| citizen | outlying possessions | .
|
One citizen | Citizen has been physically present in | None.
|
one alien | US or outlying possessions 5 years, |
| parent. | at least 2 which are after age 14 (3). | .
Notes:
1.
Absence of less than 60 days in the aggregate (total) will not break
continuity of physical presence for this purpose. Honorable service in US
armed forces counts as residence or physical presence.
2.
No specific period of residence is required if alien parent naturalized
before child reaches 18 years and child begins to reside permanently in U.S.
prior to 18th birthday.
3.
Physical presence abroad of dependent unmarried son or daughter as member of
household of a person serving honorably in U.S. Armed Forces or employed by
U.S. government or international organization may be counted as physical
presence.
4.
The retention requirement was repealed by Act of 10/10/78. Persons who had
on 10/10/78 failed to retain are relieved from having to do so. Those who
have previously lost citizenship by a failure to satisfy retention
requirements of the Acts of 1934, 1940, and 1952 may not be
reinstated.
