Cross-Border Wealth Management for Canadians Living in Texas

Are You a Canadian Living in California?

Cardinal Point is a Canada-U.S. cross-border wealth management firm that specializes in working with Canadians, Canadian expats and Canada-U.S. dual citizens living and/or working in California.

What Every Canadian Living in California Should Know

As a Canadian living in California, your tax and financial planning challenges are far more complex compared to those faced by U.S. citizens. In fact, there is a lot you need to know when living in or considering a move to California:

  • If you are moving to California from Canada, proper Canadian exit filings must be completed to ensure your tax residency is not challenged by the Canada Revenue Agency (CRA) or Internal Revenue Service (IRS).
  • If you continue to hold assets in Canada through a bank, investment account, real estate or corporation, there are strict U.S. disclosure documents that must be filed annually with the IRS and, in some cases, the state of California.
  • A Canadian retirement account, such as a Registered Retirement Savings Plan (RRSP), cannot be transferred to a U.S. retirement account, such as a 401(k) or IRA. Thoughtful management of these accounts must be addressed because of their unique tax treatment in California.
  • Your Canadian and U.S. investment accounts should be structured to complement one another to avoid double taxation issues and duplication of investment costs. Cardinal Point designs and manages integrated cross-border portfolios that are customized to each client and specific to a California resident.
  • Never leave your old Canadian address or a Canadian family member’s address on file as the address of record for your Canadian-based investments accounts. As a U.S. resident, always make sure the correct amount of withholding tax is being applied. Otherwise, the IRS and CRA, who share information, could both challenge your residency status, leading to double taxation threats.
  • Your estate planning documents should be updated and drafted by an attorney familiar with cross-border tax and estate rules.

California’s tax treatment of your RRSPs

The tax treatment of RRSPs by the State of California is different than any other state in the country. If you are resident of California and continue to hold a Canadian retirement account, such as an RRSP, the state of California requires that you report annual investment earnings on your Form 540. This means you must report all interest, dividends and capital gains annually and pay tax on those RRSP earnings. The California Franchise Tax Board does not recognize the tax-deferred status of a Canadian retirement accounts and treats the accounts as fully taxable.

At Cardinal Point, we assist individuals with RRSPs in California by using the following strategies:

  • Tax Management: Canadian retirement accounts are tax managed in an effort to eliminate taxable transactions without compromising potential performance.
    Read more about RRSP tax management in our featured article, “California Residents: Does Your Financial Advisor Tax-Manage Your RRSPs?”
  • USD-Denominated RRSPs: We have the ability to manage your RRSPs in U.S. dollars, eliminating the need to monitor the Canada-U.S. exchange rate.
  • Cross-Border Account Integration: We offer integration with your U.S. investment accounts so that the investment strategies of your Canadian and U.S. accounts complement each other.
  • Proper Tax Reporting: Our firm provides Canada-U.S. tax reporting and preparation services to ensure all IRS and state foreign account reporting and disclosures are done correctly.
  • Discharging Your RRSP: We advise on the best process, timing and tax strategy to distribute your RRSP.

At Cardinal Point, our Canada-U.S. cross-border financial advisors provide investment and financial planning advice on both sides of the border. We have the expertise, credentials and the specialized registrations that allow us to oversee your entire cross-border financial situation.

Manage Your Canadian and U.S. Cross-Border Lifestyle Complimentary White Paper Download

Whether you plan to move to the Sunshine state or are already living there, receive further insight with our free white paper download. Fill out the secure form below to receive your copy.

Who We Serve

In a state as large and diverse as California, it’s no wonder Cardinal Point serves a wide array of clients with distinct cross-border planning needs. Our clients include:

  • Canadian executives and entrepreneurs working in Silicon Valley and the Bay Area
  • Retirees and snowbirds enjoying the warm weather in Palm Springs and Southern California
  • Small business owners, professionals and executives working throughout the state
  • Those in the entertainment industry living and working in Los Angeles
  • Professional hockey players playing for California-based teams

Cardinal Point Insights

[do_widget RSS]

Ready to take the next step?

Whether you are going through a cross-border transition, planning for retirement or are simply dissatisfied with your current investment plan, we are here to help you make smart financial decisions. We set ourselves apart by offering you trusted counsel, a clear process and a complete plan for the future.

If you would like to discuss your cross-border financial planning needs or request further information, please complete our contact form below and a Cardinal Point representative will reach out to you.

About Cardinal Point

Cardinal Point is a Canada-U.S. cross-border wealth management firm that specializes in working with Canadians, Canadian expats and Canada-U.S. dual citizens living and/or working in California.

With an office in Irvine, we are the only cross-border wealth management firm located in California that services the unique financial, investment, tax and estate planning needs of Canadians living in California.

John McCord
Director of Private Wealth Services

Terry Ritchie
Director of Cross-Border Wealth Services

Dan Walkow
Chief Investment Officer & Portfolio Manager

Copyright © 2023 Cardinal Point Capital Management, ULC. All Rights Reserved.