Client is a Dual citizen living and working in US. Has IRA/401K/roth. He will be moving back to Canada in the next three years and the question is re: best way to manage those retirement accounts with regard to taxes.

My understanding is that Any income taken from an IRA/401K will be treated as taxable income in both countries, but client will receive tax credits in Canada thus helping to offset any “dual taxation.” Does this sound correct and what other factors should be considered?

Secondly, we are discussing making Roth conversions now before he moves back to Canada. I am under impression that you want to do this before because Canada will tax you on those conversions as income. To avoid he can do these conversions now (the amount will be just enough to keep him in the current tax bracket) and will do these every year until he moves back to Canada. Does that sound correct as far as making these before being beneficial?

I understand that international tax law is difficult to understand so any input would be greatly appreciated.

Thanks,