A lot of Canadians who built a life in the United States assume that walking away from a green card is as simple as handing it back at the border. It is not. In this episode, Gerry sits down with cross-border tax specialist Robert Clegg of CanadAmerican Tax Services to unpack the U.S. Exit Tax, the rule that can turn a routine move back to Canada into a six-figure tax bill.
Robert walks through how the IRS decides who counts as a covered expat, why the 8-out-of-15-year rule catches long-term green card holders off guard, and what really happens at the border when an officer decides your green card has been abandoned. Real client scenarios, including a near miss at the seven-year mark, illustrate just how much timing matters.
Whether you are holding onto a green card out of habit, weighing citizenship, or planning your eventual return to Canada, this conversation lays out exactly what to check before you make a move.
What the U.S. Exit Tax actually is, and how it mirrors Canada's departure tax with a mark-to-market calculation on the day you renounce or abandon status
The $2 million net worth threshold that determines whether you're a covered expat, and the roughly $800,000 exclusion available against any deemed gain
Why deferred compensation, including 401(k)s and RRSPs, faces a 30 percent withholding if you're a covered expat, and why CPP, OAS, and Social Security are treated differently
The 8-out-of-15-year rule for green card holders, including how even one day of residency in a given year counts toward the eight
Why a green card does not simply expire after ten years for tax purposes, and the official abandonment process required to stop U.S. filing obligations
How border officers assess whether you've abandoned your green card by living in Canada, and what filing a Canadian tax return as a resident signals
What a reentry permit is and how it protects green card holders who plan to spend up to two years outside the U.S. without losing status
Why there's no do-over once a green card is surrendered, and the limited exceptions for U.S. citizen spouses or children
The case for taking U.S. citizenship before moving back to Canada if you ever want unrestricted reentry, including the Medicare timing consideration for retirees under 65
Practical consequences of renouncing, from B-2 visitor day limits to firearm import restrictions to how a Canadian DUI or criminal record can bar reentry for former citizens
