Q&A With Gordon Pape: Navigating Your TFSA With Dual Citizenship
As someone with duel citizenship, does it make sense to buy Canada stocks in U.S. dollars for my TFSA?
Q – My husband has dual citizenship with Canada and the U.S.; because of that we have topped up my TFSA and now have money to contribute to his. To keep things simple for US income tax filing purposes, does it make sense to buy Canada stocks in U.S. dollars in this fund? The intent is to withdraw profits yearly to fund our southern winter vacation every year and after the initial purchase not have to worry about the exchange rates. I would appreciate any ideas that you have. – D.M.
A – I assume you are aware that the U.S. Does not recognize TFSAs under the Canada-U.S. Tax Treaty. Therefore all investment income earned in the plan will be taxable when your husband files his U.S. tax return. Since all U.S. returns have to be in U.S. dollars, yes it would make sense to have the assets held in U.S. dollar denominated securities. – G.P.