Retirement Planning
for the
Canadian Investor

Home Page


Client's Comments

Associated Sites


Financial Commentary

Tax Strategies

Borrowing to Invest




Design by
CY7 Computer Services


April 2014



Snowbirds beware! - again

Most snowbirds are very aware of certain travel rules when they head to warmer climates each year, namely:

182 days or 212 days
These are the number of days, depending on province of residence, you can be out of the country and still be covered by your Provincial Health Care plan. Stay longer and you risk losing your resident status. This means you could lose health care protection. Additionally, you may be required to pay a departure tax. This means you could be deemed to have disposed of your assets (even if you physically haven’t) and will be taxed on any capital gain.

American 183-day rule
If you are deemed to have a “substantial presence” in the United States under this rule, the Internal Revenue Service (IRS) will tax your world-wide income. You may be able to get around this by filing an IRS Form 8840 to apply for a “closer connection” exemption.

Additionally, getting caught in this net could also mean IRS Estate Taxes on the fair market value of world-wide assets of a snowbird’s estate on death.

Up until now, it has been mostly an honour system with regard to keeping track of the number of days outside of Canada. Kind of like hockey players refereeing their own games. That’s about to change.

Beginning June 30, 2014, when travelling outside outside Canada and presumably into the United States, travellers will have their passports scanned by the country they are departing as well as the country they are entering. This information will be shared with each country.

As part of the Entry-Exit Initiative and the Perimeter Security and Competitiveness Action Plan, this process will provide much more accurate accounts of how long someone has been in either country. Additionally, information that used to take months to obtain from either country will now be readily and quickly available.

Roy Berg, director of U.S. tax law at Calgary-based Moodys Gartner Tax Law LLP, said in the March 11, 2014 online issue of the Financial Post, “What this means for Canadian snowbirds is that they must be much more vigilant than they have been in the past about counting and reporting their days in and out of each country. They won’t be able to fudge even a little bit.”

Know the rules! – because it’s the right thing to do.

Call Hans Mathisen today at (306)242-7042.
or email -


Copyright © 2014 Life Letter. All rights reserved

[Home Page] [Services] [Financial Commentary] [Tax Strategies]
[Associated Sites] [F.Y.I.] [Client's Comments] [Biography] [More Info]

Mutual confidence is the power that binds together all harmonious human relationships.

Mathisen Financial, Inc.
335 Redberry Road
Saskatoon, Saskatchewan S7K 4W5
Bus. (306) 242-7042 Fax. (306) 242-4314